How is COVID-19 affecting fuel prices?

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In light of the pandemic, various financial markets and commodities have become volatile. As expected, fuel prices are erratic as fuel providers struggle with demand and government restrictions. It’s always a great feeling to fill your tank with the best priced fuel in your area so you get your money’s worth. With so many options to choose from and prices constantly changing, it can be difficult to determine if you paid a good price.

Current State of Things

Just last November, Forbes reported that oil prices worldwide began to drop amid the resurgence of COVID-19 cases. Countries whose main export was oil experienced the most volatility – this mostly refers to countries in the Middle-East. As per the OECD, while main exporters like UAE aren’t going to be heavily affected, smaller producers will have a hard time coping with the pandemic due to the production issues.

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As per numbers from the US EIA, prices are still generally shaky. For instance, the regular gas prices in the US are currently at $2.224 per gallon. Year-on-year, prices have dropped by at least $0.300. Since this December, however, prices are increasing. Although there are vaccines being distributed now, the rise of COVID-19 cases could once again put the market at risk.

Prices around the world, including in Germany, Nigeria, and Australia, are on the rise after a downturn last November. This fuel comparator’s page allowed me to easily look through Australian fuel prices, averaged over the quarter. As we can see, fuel prices were drastically higher pre-COVID-19, and all indicators suggest that fuel will return to these prices as regulations are eased. To find a fuel comparator in your country and region, a quick Google search will be your friend. But in general, where lockdowns are being implemented, expect fuel prices to drop once again. For now, most Asian and European countries are again imposing new quarantine rules.

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The Future of Fuel Prices

If you are expecting the prices to stabilize anytime soon, then you might be disappointed. As long as the pandemic is affecting lives, prices are going to be erratic. The best piece of advice we can offer is to keep your tank full while prices are low and to track prices online to determine if you are paying a competitive price, regardless of what is happening in the world.

 

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