With the new year, the price of CO2 for gasoline and diesel will rise.

This is likely to mean that both types of fuel will tend to become somewhat more expensive in the New Year.

The effect is unlikely to be as strong as a year ago, when a new CO2 price was also introduced for transport on January 1, 2020 and value added tax was raised again in Germany at the same time.

"Motorists won't feel it that much this time," said a spokesman for the General German Automobile Club (ADAC) of the FAZ. It is therefore at least unclear whether it is worthwhile to refuel before the turn of the year.

Christian Siedenbiedel

Editor in business.

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Inflation won't drive that up this time either.

Rather, the Bundesbank expects the inflation rate to be even lower in January than in December.

The main reason: To measure inflation, prices with the higher VAT from this year are no longer compared with those with the temporarily lowered VAT from the previous year.

This special effect artificially increased the inflation rate from July to December 2021.

It falls out at the turn of the year.

Nonetheless, inflation is unlikely to be very low in the new year either. 

30 instead of 25 euros per ton of carbon dioxide

Specifically, for reasons of climate protection, the CO2 price on fuels will increase from 25 to 30 euros per tonne of carbon dioxide on January 1, 2022. According to ADAC, this means an increase in the price of petrol by around 1.4 cents per liter and of diesel by around 1.5 cents per liter. The price of heating oil is expected to rise by around 1.6 cents per liter due to the increase in CO2 prices, and that for natural gas by 0.1 cents per kilowatt hour.

For comparison: At the turn of the year 2020/21, gasoline had increased by 7 cents per liter due to the CO2 price alone, and diesel by 8 cents per liter. Added to this was the renewed increase in VAT, which was reduced in Germany from July to December 2020 due to the corona pandemic. Mathematically, the higher tax rate was around 3 cents per liter for both types of fuel, so that these administrative costs alone resulted in a price increase of 10 cents for petrol and 11 cents for diesel. In several studies, economists have examined the extent to which the increase in VAT was passed on to customers. In any case, that did not happen completely on New Year's Eve or immediately afterwards, even if a significant jump in prices could be observed.In some cases, the prices were raised beforehand, but rose even more sharply later in the year.

Petrol then costs 1.4 cents more per liter

There will be no big shock at the gas station this time, says the ADAC.

The price increase of around one and a half cents per liter is within the scope of what is also usual for price fluctuations.

In the course of the past seven days alone, the price for Super E10 has risen on average from 1.59 euros to 1.608 euros per liter, i.e. by around 1.8 cents.

Diesel has increased in price by 1.6 cents, from 1.506 to 1.522 euros per liter.

The main reason was that the price of crude oil, which had previously fallen sharply, rose noticeably again.

The unusually strong rise in the price of gasoline and diesel in the year just ended was determined primarily by developments in crude oil and the dollar, and only to a lesser extent by the price of CO2. The margins of the mineral oil companies were probably not decisive, as surveys by the research institute RWI showed. Over the year, the price of petrol has risen by more than 35 cents per liter. As described, about 10 cents of this are accounted for by the CO2 price and VAT.

The price of crude oil has risen in the past twelve months from a good 50 to almost 80 dollars per barrel (159 liter barrel) for the North Sea variety Brent, and the dollar has also strengthened against the euro.

At the same time, the demand for gasoline, which had collapsed last year due to the pandemic, increased again.

These were factors that contributed to the sharp rise in fuel prices.

In some cases, these reached all-time highs over the course of the year, and the expensive autumn tank season in 2018 when the Rhine was low was exceeded.