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FUEL

Why are fuel prices on the rise in Switzerland?

You have probably noticed that filling up your vehicle has become a tad more expensive recently — more so in some Swiss regions than in others.

Published: 8 April 2024 12:01 CEST
Why are fuel prices on the rise in Switzerland?
The level of the Rhine river (here in Basel) is a factor in the price of gasoline. Photo by Fabrice COFFRINI / AFP

After falling during the winter months, petrol prices  in Switzerland are climbing again.

Swiss motorists currently have to pay, on average, 1.90 francs for a litre of unleaded 95 gasoline.

In some regions, however, the price is even higher.

Just as an example, at 2.29 and 2.37 francs per litre, respectively, two petrol stations along the Gotthard motorway in Airolo and Piotta in Ticino are among the most expensive in the country.

Why is there such price disparity?

Several factors are at play.

“The price at the pump is influenced by criteria such as the location of the station (city or countryside, motorway, border area, isolated regions), the rent of the land where it is located, the salary level in the region in question, and the costs to transport the fuel to this station,” according to Touring Club Suisse (TCS) motoring organisation. 

Prices are usually the highest on (or close to) motorways, in or near large cities, and at branded chain stations. You can find better deals at smaller, independent stations away from main roads.

Why have petrol prices increased after dropping at the end of 2023?

There are several reasons for the hike:

Wars in the Middle East and Ukraine

World politics affects the price of gasoline.

In addition to the war in Ukraine, which has been going on for more than two years, the conflict between Israel and Gaza, which began in October 2023, has exacerbated the petrol situation.

In this geopolitical context, the price of oil had exceeded 90 US dollars at the beginning of April for a barrel (159 litres).

Fewer oil exports

The reduction in oil exports has certainly has had an effect on fuel prices at the pump.

As an example, very recently Mexico stopped exporting large quantities of oil, with significant consequences for the global market. 

The franc is weakening

After the Swiss National Bank had cut its key interest rate from 1.75 to 1.50 percent in March, the franc has weakened against the euro and the US dollar.

Remember: while weaker franc is good for the export industry, it is less so for goods coming from abroad — as is the case with gasoline.

Higher cost of freight on the Rhine 

Petrol is brought into Switzerland mainly by cargo ships.

But shipping via this particular route becomes more expensive in summer — when the bulk of transport takes place —because the water level drops.

What’s ahead in terms of gasoline prices?

According to a recent analysis by the Swiss company Moveri, which manages BP, Ruedi Rüssel, and Miniprix service stations in Switzerland, the current price of shipping petrol via the Rhine is 16 francs. 

In 2023, these prices rose to 80 francs during the river’s lowest level.

Based on this data, the price of gasoline at pumps in Switzerland will likely increase further in the coming months.

Where in Switzerland can you get cheaper fuel?

Looking for bargains — or, in this case, least expensive pumps — is a good idea.

Autoclub memberships often offer discounts on petrol. ACS members and TCS members can save between two and five cents per litre. 

Larger petrol retailers will also often have discount deals, while Swiss supermarkets also offer deals with particular gas station chains. 

Prices are usually the highest on (or close to) motorways, in or near large cities, and at branded chain stations. You can find better deals at smaller, independent stations away from main roads.

However, you should avoid going too far out of your way to save on fuel.  

“A one-cent difference on the price of the litre justifies a detour of  two to three kilometres, at most. Otherwise, the excess consumption drowns the savings on a 50-litre tank”, according to TCS. 

This is a useful website listing cheaper petrol options throughout Switzerland. 

READ ALSO: Where in Switzerland can drivers find the cheapest fuel?

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SHOPPING

REVEALED : Are ‘discount’ supermarkets in Switzerland really cheaper?

Lidl, Aldi and Denner claim their prices beat those of large Swiss retailers. But is this really the case?

Published: 18 April 2024 11:40 CEST
REVEALED : Are ‘discount’ supermarkets in Switzerland really cheaper?

Common consumer goods (except one) are typically more expensive in Switzerland than in neighbour countries — sometimes by much.

This includes food.

READ ALSO: Why Switzerland is the most expensive country in Europe

That is especially the case of largest Swiss chains, Migros and Coop, while Denner, Lidl, and Aldi say their food prices are significantly lower.

To find out whether this claim is actually true, journalists from RTS public broadcaster’s consumer programme went shopping in each of these supermarkets. 

They purchased the same 30 products in each of the five supermarkets on the same day, to ensure that the price comparison is as accurate as possible.

Not what you’d expect

In each of the stores, the investigators purchased only the lowest priced items from the supermarkets’ budget lines.

It turned out that most money was spent at Denner, widely considered to be one of the lowest-priced supermarkets.

The total for the 30 items came to 181.67 francs — more than was spent at the country’s more expensive stores, Migros and Coop, where identical basket of goods cost 170.37 and 167.82 francs, respectively.

(That, in itself, is surprising as well, because Migros typically has lower prices than Coop).

As for the other two supermarkets, these purchases cost 166.59 francs at Aldi and 162.05 at Lidl.

So the difference in price between Migros and Coop versus Aldi and Lidl is minimal. But what is even more surprising is that the cost of groceries at ‘cheap’ Denner is actually highest of the lot, by between 11 and nearly 20 francs.

Migros and Coop performed quite well in the comparison survey because most of the items purchased in those stores came from their budget lines, M-Budget and Prix-Garantie, respectively, both of which were introduced to compete with Aldi and Lidl.

But how important is price? Patrick Krauskopf, a professor of anti-trust law, told RTS: “German, French, English, Spanish and American consumers pay a lot of attention to price. In Switzerland, consumers place more emphasis on quality of service. Price is almost secondary.

“Distributors have realised this and have stopped competing fiercely on price.”

Big versus small

While this particular analysis focused on supermarket chains, another survey, conducted at the end of 2023, looked at prices in small grocery shops. 

Common logic has it that it is cheaper to shop in supermarkets than a local corner store, because big retailers purchase products in large quantities, which means lower prices for consumers.

However, prices in some local shops were found to be “up to 30 percent cheaper than Migros and Coop.” 

The reason is that in order to cut costs, small grocers may buy their products from the most cost-effective suppliers, a tactic which includes importing some items.

Another reason for lower prices is that unlike major supermarkets, which ‘pretty up’ their stores for better presentation of products, these small retailers are ‘no-frill’ shops. This means little money is invested in décor, so there are no extra costs to pass on to consumers.

 READ ALSO: Why it might be cheaper to avoid the big supermarkets in Switzerland
 

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