Understand the Price of Diesel in Europe

Are you finding that fluctuations in the global crude oil market do not translate directly to your transport budget? Many shippers face a disconnect between falling crude oil prices and the stubbornly high price of diesel. The answer lies in a complex interplay of refining costs, regional policies, and seasonal demand that determines the final price at the pump. By understanding these factors, you can gain clarity on your fuel expenditures and manage them more effectively. 

Key takeaways 

• A global oil surplus and expectations for subdued crude oil prices have helped limit the upward risk for diesel prices. 

• In the U.S., higher-than-normal diesel imports, mild early-winter weather, and weak January demand helped reduce near-term buying pressure. 

• European retail diesel prices (less VAT) averaged €1.242/litre in January, a slight decrease from December due to strong supply and soft demand. 

• The price decline in Europe was limited by diesel tax increases across the continent and a late-month cold spell that boosted heating-oil demand and tightened short-term supply. 

Why the price of diesel doesn’t always follow crude oil 

When forecasting diesel fuel costs, focusing too heavily on the price of a barrel of oil can be misleading. The final price of refined products like diesel is influenced by additional market dynamics. For example, in 2025, while the cost contribution from Brent crude oil fell by more than 16 percent, diesel commodity prices only declined by about 4.5 percent. 

This gap highlights a critical factor: the diesel refining premium, also known as the crack spread. This is the cost difference between a barrel of crude oil and the diesel fuel produced from it. Throughout 2025, this premium remained resilient and even increased at times, preventing the savings from lower crude oil prices from reaching the end consumer. 

Factors that contributed to this resilience include: 

• Increased Summer Demand: Internationally, demand ramped up in July, driven by passenger vehicle use and a hotter freight market. 

• Seasonal Pressures: As the year progressed into autumn and the holiday season, agricultural demand and cold weather increased the premium. 

This trend shows why managing fuel and freight costs independently is essential. Bundling them into an all-in rate can lead to overpayment when fuel market costs decrease. By adopting a transparent and data-driven approach to managing each component of transport costs, companies can adapt more effectively to market fluctuations and protect their bottom line. 

What to expect for the price of diesel across Europe 

Looking ahead, several factors will continue to influence the price of diesel across Europe. Shippers should monitor these developments to anticipate changes in their transport energy costs. 

1. The European Union has more stringent policies regarding refined products from Russian crude oil. These regulations, which began in early 2026, immediately introduced upward price pressure into the market. 

2. A gradual decline in refining capacity in both Europe and the U.S. has put stress on supply chains on both sides of the Atlantic. This structural tightness means the market is more susceptible to price shocks from disruptions. 

3. Seasonal pressure remains a constant variable. Cold weather and intense precipitation can lead to temporary refinery closures, while spring refinery maintenance can tighten supply. This is often followed by elevated demand in the summer for transport and in the autumn for agriculture. 

For shippers looking to gain control over these factors, solutions like Fuel Recovery offer a way to standardize fuel reimbursements. By separating fuel from transport charges and accounting for the specific price, tax, time, geography, and equipment of each movement, organizations can ensure they pay a fair and accurate price for the fuel they consume to move their goods to market. 

Understand diesel costs & calculate accurate reimbursements with fuel recovery 

The question of “How much is diesel?” doesn’t often have a simple answer. While global crude oil prices set the foundation, the final cost is shaped by refining premiums, geopolitical policies, declining refinery capacity, and seasonal demand cycles. The significant gap between diesel price trends and all-in transport rates underscores the need for shippers to manage fuel costs with data-driven insights. By understanding market drivers and using market-based fuel cost calculations, companies can move beyond all-in rates and achieve greater accuracy, fairness, and transparency in their fuel spend. Learn more about Fuel Recovery today. 

Frequently asked questions about the price of diesel 

What factors affect the price of diesel? 

Diesel prices are influenced by a combination of factors. These include the price of crude oil, refining costs (the crack spread), government taxes, and distribution and marketing costs. Additionally, supply and demand play a crucial role, with influences from seasonal changes (winter heating oil demand, summer driving season), geopolitical events, and regional refining capacity. 

Why don't diesel prices fall as much as crude oil prices? 

Diesel prices do not always move in lockstep with crude oil because of the diesel refining premium, or crack spread. This premium can remain high or even increase due to factors like strong seasonal demand, low inventory levels, or limited refining capacity. This means even if crude oil is cheaper, the cost to produce and supply diesel can prevent those savings from being fully passed on to the consumer. 

How do seasonal changes impact the cost of diesel? 

Seasonal changes create predictable shifts in diesel demand and price. In the winter, demand for heating oil, which is chemically similar to diesel, increases and can tighten supply. In the summer, increased travel and freight activity boosts consumption. Finally, autumn sees a ramp-up in agricultural activity for harvesting, which also increases diesel demand and can put upward pressure on prices.