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Petrol hike marks start of Swedish ‘driving season’

Tourists have been enjoying unexpectedly inexpensive road trips in Sweden this summer thanks to falling petrol prices. But the treat turned out to be as short as it was sweet.

Published: 3 August 2015 12:48 CEST

Petrol hike marks start of Swedish 'driving season'

Fuel prices are going up in Sweden. Photo: Fredrik Persson/Scanpix

Sweden's leading petrol companies raised their guideline price of unleaded petrol by 0.20 kronor on Monday, bringing the total price up to 14.29 kronor ($1.66) per litre.

The hike follows a number of cuts in the past month during a summer that has been unusually kind on Swedish drivers.

Normally, prices are pushed up at this time of year due to rising demand as consumers hit the road for their summer holiday.

But thanks to the price of crude oil falling across the globe, the cost at pumps in Sweden has remained lower than normal this season.

“I like to see the price of crude oil as a surface of water with petrol prices as corks that can either float high or low in the water. At the moment, the price of petrol is at its highest, but the price of crude oil has been falling steadily,” Ulf Svahn, chairman on the Swedish Petroleum and Biofuels Institute (SPBI), told The Local last month.

The benchmark price for crude oil worldwide, Brent Crude, was $51.09 per barrel on Monday – down from an average of $102 in July last year.

READ ALSO: The Local's ultimate guide to travel in Sweden

Tourists have been flocking to Sweden this summer, despite the rather disappointing weather.

But foreign drivers hoping to score an even cheaper deal are advised to wait until September, when there's likely to be a sharp drop in costs at the pumps.

”The classic European summer holiday is in August, or as we call it 'driving season', so we have to wait until September before demand — and the price — drops,” said Svahn.

Etanol fuel E85 also went up by 10 öre to 10.83 kronor a litre on Monday. The price of diesel remained unchanged at 12.90 kronor.

Higher fuel costs and Autobahn speed limit: How can Germany go green?

Photo: DPA

An internal paper from the agency, seen by the Süddeutsche Zeitung, details what Germany would have to do in the transport sector to protect the climate.

The paper, which was drafted in June when the government was preparing its climate package but never became public, says the government would have to get rid of the commuter allowance and increase the price of fuel, among other measures.

According to the study, the tax on diesel – which has so far been tax-privileged – would have to rise by 70 cents to €1.19 per litre by 2030, while petrol should become 47 cents more expensive.

In addition, the toll imposed on trucks (LKW Maut) would have to rise sharply – and a speed limit of 120 kilometres per hour would have to be introduced on the Autobahn, a move that would be extremely controversial in car-loving Germany.

READ ALSO: How our readers feel about imposing a speed limit on Germany's Autobahn

The newspaper said the agency wants the Transport Ministry to draw up concrete proposals. In principle, however, the measures from the report are “suitable for achieving the climate targets in the transport sector”, a spokesman from the Environment Agency said.

Worst impact on environment

Of all Germany's sectors, transport has the worst climate record. While emissions have fallen since 1990 in the industrial, agriculture and construction sectors, they have been stagnating in transport.

The number of cars has increased, while freight traffic on the roads and the number of flights have also gone up.

Photo: DPA

According to plans by the German government, climate-damaging emissions from traffic are to be reduced to 98 million tonnes of CO2 by 2030. At current rates emissions will stand at about 160 million tonnes in that year.

READ ALSO: 'The future is already here': How climate change is affecting Germany

The government wants to achieve this by promoting electric cars and alternative fuels. Rail travel is also to become cheaper, and the tax on airline tickets is to rise.

A gradual increase in the CO2 price will initially raise the price of fuel by three cents per litre. What exactly this will achieve for the climate is currently being calculated, but results are not expected until the beginning of the new year.

But according to the highest German environmental authority, this will by no means be enough.

“According to our estimates, there remains a climate protection gap of 20 to 30 million tonnes of greenhouse gases,” said Maria Krautzberger, head of the authority.

Climate package speed bumps

The government's “climate package”, a collection of four bills with policies including increases to the cost of air travel and the introduction of a carbon pricing system, was supposed to come into force at the beginning of next year.

However, it hit the rocks last week in the upper house of the German parliament, the Bundesrat, amid fears over financing and criticisms that it did not go far enough.

READ ALSO: What does Germany's planned climate protection package mean for you?

Representatives from Germany's federal states rejected proposals for a series of tax reforms, including a reduction in VAT on train tickets and temporary tax exemptions for the restoration of buildings.

Amid fears that the federal states would have to make up the lost revenues themselves, the upper house refused to pass the bill, which will now be subject to negotiations between the two chambers.

Other elements of the climate package were passed successfully on Friday.

READ ALSO: Tens of thousands of people in Germany rally against climate change

A surcharge on plane journeys of up to 2500 kilometres will be hiked by 74 percent to €13, while for longer journeys it will be raised to up to €60.

The carbon tax, which would later be incorporated into an EU emissions trading system, was also passed.

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