Gasoline prices have hit a new low in Denmark. Danske Bank's chief analyst does not rule out that another plunge is on the way.
The price of gasoline in Denmark has hit a new low, and there are indications that the price may fall further.
Drivers are currently experiencing significantly changing fuel prices, something that has a direct impact on Danish households' transport costs.
Earlier this year, many car owners saw fuel prices rise. In fact, it happened as early as January 1st, because the government raised taxes.
However, that has changed now. Not the government's taxes, but rather the pure fuel price.
The price of gasoline plunged to a level corresponding to the price at the turn of the year on Wednesday this week. This means that the series of taxes that caused the price to increase at the turn of the year have now been offset.
Gasoline prices aren't finished falling – they could plummet
According to Jens Nærvig Pedersen, chief analyst at Danske Bank, the fall in oil prices is one of the most important factors behind the price drop.
– The price of oil has fallen quite sharply in the past week – and there are a couple of reasons for that. The most notable one is that OPEC (the largest oil-producing countries, ed.) said earlier this week that they are increasing production, he tells TV2 Øst .
The OPEC countries' decision to increase production coincides with US President Donald Trump's introduction of trade restrictions, including tariffs on goods from Canada and Mexico.
Furthermore, the president is threatening to impose the same tariff on all cars from Europe.
– With trade restrictions, fewer goods have to be moved, and less oil is used, explains Jens Nærvig Pedersen.
Increased supply and decreased demand have resulted in a drop in prices. In addition, the dollar, in which oil is settled, has also become less valuable.
The development in gasoline and diesel prices has resulted in financial relief for many Danish families.
For a family with an annual driving need of 30,000 kilometers, the savings at current prices is something that can be converted into 1,000 kroner over the past month and a half.
Helge Pedersen believes that OPEC's decision to increase production may be influenced by Donald Trump's desire for lower oil prices.
He also estimates that prices could fall further. However, the chief analyst does not predict how far the price of gasoline could fall.
– We actually have to go back quite a long way to find a similarly low level to where the oil price is now, says Helge Pedersen.
At the turn of the year, 61.4 percent of Danish cars ran on gasoline, while diesel cars accounted for 25.9 percent of the vehicle fleet. Hybrids made up 3.5 percent, while electric cars took the remaining 9.1 percent.
That said, it is difficult to find countries other than the Scandinavian ones where the electric car is as popular.
A count from the European car manufacturers' association ACEA shows that only 1.8 percent of cars in Europe are electric. Including hybrids, the number of electrified electric cars is still below 4 percent.
