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Thursday, 14 April 2011

Dutch gasoline price hits new record. Total SA’s CEO expects gasoline to hit the €2-mark in Europe.

Today was a new rock bottom in the rising gasoline price, when the price of a litre of gasoline hit the €1.75 mark in The Netherlands (i.e. $9.54 per gallon).

To give you an impression: to fill up the 70 litre (18.5 gallon) tank of my car would cost me €122.50 ($176.40).

The surging gasoline price forced Christophe de Margerie, the CEO of French oil company Total SA, to make the statement that gasoline might soon hit the €2-mark. (source:

The price of 95-octane unleaded petrol will inevitably hit EUR 2 (USD 2.9) per litre, Christophe de Margerie, the chief executive of French oil and gas group Total (EPA:FPE), said in an interview for daily Le Parisien on Tuesday. 
The CEO was not able to give exact forecasts for the timing of the price hike. He warned that the rise should not be too abrupt, otherwise the consequences may be dramatic.
Oil prices have recently hit their three-year high. 
In France, 95-octane unleaded petrol is currently sold at EUR 1.53 per litre. (EUR 1.0 = USD 1.451)

I am afraid that the CEO of Total might be right. And a price of €2 in France means probably a price of €2.40 in The Netherlands, as the price of gasoline in The Netherlands is currently among the highest in the world (and remember, the prices mentioned in this link are already outdated). Why is gasoline in The Netherlands so incredibly expensive?

See the following graph:

Build-up of Dutch gasoline price (data: Dutch ministry of Finance)

You can see in this graph (source for data on taxes and duties: Dutch Finance Ministry) that only 43% of the fuel price in The Netherlands is the net price of gasoline. That means that 57% of the current price of €1.75 consists of taxes.

As the excise duty is a fixed price of €0.7199 cents per litre, the percentage of taxes decreases as the gasoline price gets higher. However, the percentage of value added tax remains stable when the price of gasoline gets higher.

And besides that the net price per litre of gasoline is about €0.08-0.10 higher than in Germany, which also adds to the much higher gas prices in The Netherlands (according to

The gas prices in The Netherlands are a disaster and a disgrace. And the only three things that are preventing a “gas revolution” here are:

·     The large percentage of leased company cars
o    If “the boss” pays the gasoline, why should you care?!

·     The large amount of diesel cars in The Netherlands
o    17% of the total number of cars (source:, but with a much bigger slice of the driven kilometers
o    Diesel is with €1.42 much cheaper than gas.

·     The fact that Dutch people are used to paying ridiculous prices for car taxes, gasoline, parking and other car-related subjects.

So the average Joe in the street will raise his shoulders and pay the higher gas prices. But will Joe still do that if the price hits the €2.40 mark? I am not so sure about that. And then the Dutch government could be in for a hard time.

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