Falling oil prices have yet to lower Swiss petrol costs

Swiss motorists are still waiting for cheaper petrol despite a stabilising oil supply, SRF reports. Limited refining capacity and higher fuel transport costs are delaying the impact of falling oil prices at the pump.

Oil tankers have resumed sailing through the Strait of Hormuz despite continued tensions in the Middle East, but the number of passages remains 30 to 40 per cent below pre-war levels. The reopening has had little effect on the price of a barrel, which has stayed just below 100 dollars since early September as export volumes fluctuate and markets remain tense.

Marcelo Olarreaga, an economics professor at the University of Geneva, told SRF’s French-language broadcaster RTS that oil market shocks take longer to reach petrol prices in Switzerland and elsewhere, especially when oil prices fall.

Refining capacity is a key factor, said Moreno Volpi, a member of the management team at the Touring Club Switzerland. When Cressier, the country’s only oil refinery, stopped operating for two weeks, prices at petrol stations rose quickly. Refining capacity was limited while demand remained high despite reduced supply, he said.

Transport costs have also risen as the Rhine has recorded historically low water levels. About half of the fuel destined for Swiss road traffic is transported along the river. Low water levels mean ships can carry less cargo, increasing transport costs. Volpi said a rise in the Rhine’s water level was the only thing that would bring prices at Swiss petrol stations down.