The 2018 mineral oil market brought a number of ups and downs with which medium-sized businesses and the respective hauliers were able to successfully cope through flexible and well-thought-out logistics, thus ensuring reliable supply of final customers in the heating market and at petrol stations.

According to the available data of the working group “Energiebilanzen für den deutschen Markt” [Energy Audits for the German Market], consumption of mineral oil decreased by a total of 5.6 per cent last year. Heating oil sales recorded the sharpest decline. There were only slight reductions in petrol and diesel, whereas sales of aviation fuel increased.

In the heating oil area, a number of additional factors apparently caused a drop in sales of around 15 per cent in Germany according to previous analyses. The failure since early September at the Bayernoil refinery in Vohburg brought about by an explosion and the simultaneous low water level on the Rhine, which was accompanied by supply bottlenecks, were two problems that proved a headache for many a supplier in the petroleum business in 2018. The south of the Federal Republic was particularly hard hit and thus ironically the region with the most heating oil customers.

Bild Erdölraffinerie

Picture: oil refinery
© Eak-sikgun / shutterstock.com

Rising prices, rising costs

They reacted to the prices, some of which were considerably higher than current prices between September and November 2018 and postponed their orders or only reordered smaller quantities. This shows that unlike the petrol station market, where sales and consumption are close together, these two parameters sometimes differ considerably in the heating market. Heating oil customers take advantage in this case of their secure energy reserves in their own tanks in order to “sit out” price peaks, only to replenish their stocks again under more favourable conditions.

This regularly results in wide fluctuations in demand, to which the trade with its tankers and drivers needs to adapt. The versatile vehicle fleets in the medium-sized business sector prove a major advantage in this case. These were able to overcome the bottlenecks in supply as well as compensate for lulls in sales.

In view of the sometimes difficult supply situation in southern Germany, the Sunday driving ban was temporarily lifted. Although this was a relief for some and balanced the pressure of having to ensure markedly higher transport capacity with the same number of vehicles, many companies pointed out that the restricted number of drivers was the actual limiting factor. In order to grant their employees at least one day off a week, Sunday remained largely unworked despite the dispensation.

The new German federal road toll imposed an additional cost burden of several 1000 Euros for logistics companies from July 2018 onwards. Despite fierce competition, this ultimately resulted in an increase in retail prices, as companies are forced to re-apportion the costs in order to be able to operate profitably.

Trends

Another noteworthy aspect of the sales trend in 2018 is the first ever decline in demand not only for petrol but also for diesel fuel in Germany. Despite increasing demands on delivery traffic, diesel sales declined for the first time by almost 3 per cent after years of continuous upward development. Lubricants and liquid gas also recorded losses in sales during 2018.

It can be assumed that more efficient heating technology, renewable energies and thermally insulated buildings as well as e-mobility and increasingly more economical engines will further reduce energy consumption over the coming years and contribute to changing the energy mix in buildings and in mobility.

The question also arises as to how an acceleration in energy turnaround and further more stringent climate policy requirements will affect consumption of mineral oil in the individual sectors during coming years.

At the same time, the forecasts are unanimous that a turnaround in energy policy cannot work without liquid energy sources, which in future will be produced to a lesser extent from fossil raw materials and will therefore emit consistently smaller volumes of CO2. The proportion of gas as a fuel – whether as liquefied petroleum gas (LPG), liquefied natural gas (LNG) or compressed natural gas (CNG) – is also likely to increase, including in heavy goods transport.

On a global scale, however, energy requirements will continue to increase, unlike in Germany and Europe. Although mineral oil consumption is likely to stagnate in the coming decades, it will nevertheless remain very important.

All this is likely to have repercussions for the manufacturers of tankers and special vehicles, whose market is under transformation in same way as that of energy traders and for whom export business is becoming increasingly important.

From: AGEB quarterly report Q4 (PDF), page 18

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