Consumers in Germany stocked up on heating oil during the past week in preparation for the CO2 tax hike in 2025, taking advantage of the recent drop in prices.
Traded volumes of heating oil, as reported to Argus, rose by almost half last week on the week.
Consumers seized the opportunity of low prices — which had fallen by about €4.50/100l since 22 November — to build up their heating oil inventories again, despite storage levels still being unusually high. Privately-owned heating oil tanks were maintained at an average filling level of 60.6pc on 5 December, two percentage points up from 2023, as shown by data from Argus MDX.
The continued stocking up on heating oil is largely because of the anticipated price increase from 1 January.
Germany's CO2 tax will increase from €45/tCO2eq in 2024 to €55/tCO2eq in 2025. This would result in a price increase of about €2.70/100l for heating oil, according to Argus calculations. But traders are reporting premiums in the range of €3/100l to €4/100l for heating oil in January.
Diesel prices could increase by about €3.50/100l in January, Argus calculations show. In addition to the CO2 tax increase, the greenhouse gas (GHG) quota, which will rise from 9.35pc to 10.6pc next year, will also impact diesel prices. Diesel for delivery in January is currently trading at between €4/100l and €7.50/100l higher than for December delivery, traders said.
As a result, traders anticipate that diesel demand will also increase before the year ends, but it remains low so far.
The fill level of industrial diesel tanks has started to recover after hitting a four-year low at the beginning of November. The level was about 53.6pc on 5 December, less than one percentage point below the same time last year.
