The diesel price has risen sharply since the turn of the year. The expectation for 2020 is that price records will be broken. This is partly due to the tensions in the Middle East. What does this mean for the price that agricultural entrepreneurs pay for diesel?
The diesel price of LTO Ledenvoordeel peaked on January 6 at a level of €111,50 per 100 liters for purchases of 2.200 to 4.000 liters and including a €2 member discount. The price of Farmers4All is at a comparable level. Not only these diesel prices from the purchasing collectives for the agricultural sector rose sharply. The price of diesel at regular filling stations reached the highest level in 5 years.
Records broken
The expectation in fact, the records set in 2012 will be broken this year. The reason for this is, among other things, an increase in excise duties of almost €0,08 cents per liter that came into effect on January 1. The strong dollar exchange rate also plays an important role. After all, the stronger the dollar, the more a barrel of crude oil costs.
Yet there is more going on. Diesel prices follow the price of oil. The price of a barrel of Brent crude oil has risen from $60 to $70 since the beginning of December. This is partly due to the fact that less oil is pumped.
Unrest in the Middle East
The unrest in the Middle East, after the US killed Iranian general Qassem Soleimani, also plays an important role. The risk is that the unrest will put pressure on oil production in Iran, Iraq and Saudi Arabia. Fear of closing the Strait of Hormuz also plays a role. 17 million barrels of oil are transported through this strait (bordering Iran) every day.