German oil firms may pass E10 fines to drivers; agency probes market

22 April 2011 18:58  [Source: ICIS news]

TORONTO (ICIS)--Germany’s refiners may seek to pass on to drivers the penalties they face from the failed launch of 10% bioethanol blended gasoline (E10), officials said on Friday.

“[Refiners] will have to take those [penalties] into account, and the market will show whether those costs can be passed on to drivers,” said Karin Retzlaff, spokeswoman for Germany’s refining trade group MWV.

Germany’s transport minister said this month the government would fine oil firms should they fail to supply and sell sufficient volumes of E10.

Germany approved E10 for sale at the pump since 1 January, but the fuel is unpopular as many drivers fear it could damage the engines of their cars.

After introducing E10, refiners stopped supplying E5 gasoline with 95 RON (research octane number), thus forcing drivers wishing to avoid E10 to resort to a more expensive 98 RON super (premium) gasoline, which requires greater amounts of octane-boosting ethers. 

The increased demand for 98 RON gasoline led, in turn, to increased demand and higher prices for methyl tertiary butyl ether (MTBE) in Europe - contrary to market expectations that the launch of E10 in Europe’s largest economy would destroy MTBE demand in favour of ethanol.

Meanwhile, Germany's competition regulator, the Bundeskartellamt, is probing the petrol market for potential irregularities. The agency is expected to disclose its findings next month.

Rainer Hillgartner, a spokesman for drivers lobby Autoclub Europa, said the oil and refining industry was an oligopoly with immense pricing power.

Germany’s pump prices - with super gasoline averaging €1.59/litre on Friday - are at their highest levels since the summer of 2008, when oil prices were close to $150/bbl, he added.

($1 =  €0.69)

Check out Doris de Guzman’s Green Chemicals Blog for views on sustainability issues


By: Stefan Baumgarten
+1 713 525 2653



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