German gas stations don’t earn much

For five years there has been a “market transparency office” for petrol in Germany. Did this mean that the prices at the petrol stations fell?

Gas station in Frankfurt

FIt has been in existence for five years now, the so-called market transparency agency for fuels. Reason enough for the Federal Ministry of Economics to ask what the whole thing has achieved. The idea was simple: the prices of more than 14,000 German petrol stations are reported to a central database, which then provides data for petrol price apps. They should give motorists a better overview of where petrol is cheap at the moment – so that competition takes away the power of the oil companies to charge excessively high prices. But do people even use the gasoline pricing apps? And if so, does that have an impact on the prices at the petrol stations?

In any case, the ministry reports that around 350 gasoline price app providers such as Clever-Tanken have applied for permission to use this data since the market transparency agency was set up. 50 apps are now in use. Some had previously worked with gasoline prices that were reported by users – but the new data were “more up-to-date and more reliable”.

In a representative survey of motorists, around two thirds said they were familiar with the apps, but only one third said they had downloaded one. Two thirds of the latter said they used the services “constantly” to “occasionally”. According to the ministry, several million consumers in Germany are likely to use these apps.

Austria only allows price changes once a day

The drivers were also asked how many cents they saved in terms of how much they found it worthwhile to compare gasoline prices. Only people who have to pay for their own petrol were selected for this. About half of them stated that they were ready to switch to another petrol station or another time of the day at just 5 cents per liter. For about another quarter, 10 cents per liter of price savings are necessary. In fact, according to the survey, a quarter of those surveyed now fill up at different times of the day than before – around 15 percent have changed their petrol station since the apps appeared.

The ministry has not decided whether or not gasoline has really become cheaper in Germany thanks to the apps. However, it refers to an investigation by the government in Austria, according to which the gasoline prices in Germany after deduction of taxes and in terms of margins were among the lowest in Europe; this does not apply to Austria itself. This is also remarkable because Austria has taken a different approach to regulating the price of petrol and only allows price changes once a day, always at 12 noon. Some had already called for that for Germany.

People really refuel when it’s cheap

At the beginning of the holidays and every Friday, unlike in the years 2008 to 2011, no higher gasoline prices can be determined, the ministry writes. On the other hand, prices fluctuated more during the day. There used to be an average of 1.2 price increases and 3.6 decreases per day at a gas station, now 3.1 increases and 7.4 decreases.

The pattern of gasoline price changes during the day would have changed several times. Before mid-2015, starting from high prices at night, prices fell continuously to a minimum towards evening, before they rose again to the nightly starting level with a large price increase. From summer 2015 onwards, an additional price increase around noon could be observed. In April 2017, there was another price increase around 5 p.m. Most recently, at the beginning of 2018, the drastic price increase, which had previously been observed in the late evening hours, was partly shifted to the early morning. Car drivers continued to refuel at noon around 12 p.m. and in the early evening between 7 p.m. and 8 p.m.

One question remains: do the oil companies now only offer petrol cheaply at those times of the day when nobody is filling up anyway because everyone is busy eating, watching TV or going out? Or do people refuel, the other way around, but mostly at the cheap times? The ministry mentions that the economist Justus Haucap looked into it. When asked, Haucap said: “The second is the case – people use the price dips intensively and fill up when it is cheap.” And increasingly, since there was a market transparency unit, apps and corresponding reporting in the media. Previously, only 29 percent of all gasoline was filled at a gas station at the 10 percent cheapest prices, then 37 percent. The share at the 20 percent cheapest prices has risen from 44 to 54 percent, the share at the 25 percent cheapest prices from 50 to 59 percent. “It’s especially expensive at night, after 9 p.m.,” says Haucap, “but that’s where the fewest people fill up.”