Gasoline Prices Set to Soar Above €2 per Liter in New Increases: Blame the “Perfect Storm”

Why Gas Prices Will Rise Well Above 2 Euros per Liter

The price of gasoline could soon exceed 2 euros per liter.
Currently expected to be around 1.920 euros, while gasoline already costs over 2 euros per liter on the highway (2.003 euros).

Rising Oil Prices and Global Factors

In recent years, we have witnessed various so-called “perfect storms” that have had a bullish impact on oil prices, from supply chain delays to the war in Ukraine and other geopolitical events.
These have led to inflationary pressures, prompting central banks to raise interest rates, affecting mortgage rates and weakening purchasing power globally.

Today, inflation is easing, and major central banks – including the ECB and the Fed – are preparing to cut rates, which currently remain at their peaks.

There are other factors at play that could drive gas prices even higher in this context.
Small and large storms brewing that together form a “perfect storm.”

The Role of Oil in Monetary Policy

The surge in oil and gas prices has played a significant role in the inflationary spikes experienced in recent years.
Despite gas prices in Europe seeing a decline, a rise in oil prices could once again push inflation upwards, impacting central banks’ decisions on interest rates.

This might have repercussions on the intention of central banks to cut interest rates, especially in the U.S., where inflation indicators remain stubbornly high and the economy continues to outperform expectations.

Impact on the Electric Vehicle Market

Another consequence of rising fuel prices could be a resurgence in electric vehicle (EV) growth trends.
The shift to electric saw a significant boost in 2022 as fuel prices surged.
However, concerns about charging infrastructure, range anxiety, and resale value drops have caused a shift back to combustion engine vehicles.

The prospect of gasoline prices surpassing 2 euros per liter could lead drivers to reconsider the electric option once again.
Only time will tell.