Europe’s diesel crisis is putting fresh pressure on drivers, businesses and farmers as disrupted oil supplies push fuel prices higher. France recorded a new diesel price record on Sunday, while European wholesale prices have also surged. Hungary is feeling the effects too, but the government has opted for targeted financial support rather than bringing back a nationwide fuel price cap.

Diesel is particularly important to the wider economy: it powers freight transport, agricultural machinery and much of the equipment used in construction and industry. When its price rises, the consequences can eventually extend beyond filling stations to the cost of transporting food and other goods.

The latest price increase comes as fighting in the Middle East and damage to Russian refining infrastructure continue to disrupt international fuel supplies.

Diesel prices reach record levels

France provided one of the clearest signs of the worsening situation on Sunday, 20 September. According to an AFP analysis  of prices displayed at more than 8,700 filling stations, the national average diesel price reached almost EUR 2.41 per litre, breaking a record set just one day earlier.

Petrol has also become more expensive in France. The widely used SP95-E10 grade averaged more than EUR 2.17 per litre on Sunday, while SP98 exceeded EUR 2.28.

The pressure is not confined to France. Reuters reported on Friday that European diesel futures had reached approximately EUR 183 per barrel during the week. That is a wholesale market price, rather than the amount motorists pay at the pump, but it illustrates the strain on fuel supplies.

Some French filling stations have experienced temporary shortages, although the French government has rejected suggestions of a nationwide supply crisis. Elsewhere, governments are considering or introducing measures to ease the impact on consumers. Germany, for example, has announced a temporary fuel tax reduction equivalent to approximately EUR 0.17 per litre, due to take effect on 1 October.

Why is diesel becoming so expensive?

Refineries turn crude into diesel, petrol and other fuels, and several important sources of refined products have been disrupted by the conflicts in the Middle East and Ukraine.

According to Reuters, diesel exports from the Middle East fell by more than 50% between March and August. Russian output has also been affected by repeated attacks on refineries, while restrictions on Russian exports have added to pressure on the international market. Together, these developments have reduced the supply available to importing countries.

Europe is particularly exposed to disruption in the trade in refined fuels. Reuters reported earlier this month that interruptions to Middle Eastern exports had cut the region’s supplies of diesel and jet fuel, leaving inventories at a 12-year low.

If you missed it: Fuel prices soar in Hungary: Diesel hits 4-year high – what does the government say about fuel price caps?

Hungary: No return to protected fuel prices

Hungarian motorists are also paying more for fuel. According to Holtankoljak.hu , the national average price on Friday, 18 September, was HUF 709 per litre for diesel and HUF 635 for 95-octane petrol. Prices can vary between filling stations.

The Hungarian government, led by Prime Minister Péter Magyar, has decided against reintroducing the previous fuel price cap. The decision reflects concerns that forcing prices below market levels could lead to supply shortages.

Instead, they have opted for targeted support rather than reinstating protected fuel prices. Eligible diesel car owners are set to receive HUF 5,000 per month until the end of the year, while farmers can reclaim the excise tax on diesel. However, these measures do not cap pump prices, leaving Hungarian motorists exposed to further fluctuations in the European fuel market.

More details: Hungary reveals new diesel subsidy details: Who gets EUR 55 and when will payments begin?