Diesel Prices Keep Climbing: Refining Margins, Not Just Crude, Are to Blame

Why Diesel Costs More at Slovenian Pumps Every Week — Even as Gasoline Gets Cheaper

Slovenia's regulated fuel prices moved in opposite directions again on the latest weekly update: diesel rose to €1.882 per litre at stations outside the motorway network — the fifth consecutive weekly increase since late June — while gasoline fell for a second week running to €1.5583 per litre. On motorway forecourts, diesel now costs roughly €2 a litre and gasoline about €1.8.

The steady climb matters well beyond the forecourt. Fuel is a direct household cost, and higher prices are already eroding purchasing power in Slovenia; for transport, agriculture and other fuel-intensive industries, diesel is an input cost, which is why policymakers watch pump prices as a source of inflationary pressure.

The price pressure is no longer simply a crude-oil story, according to an ECB analysis. Brent spiked to $138 a barrel in early April after the Middle East conflict escalated — nearly double its end-February level — and eurozone retail diesel peaked at €2.18 a litre in the first week of April before easing. A renewed escalation since early July pushed prices up again, to around €1.98 per litre across the eurozone in the third week of July.

The ECB's key finding: a fast-growing share of the pump price now comes from refining margins — the difference between what refineries pay for crude and what they charge for finished fuel. Those margins have roughly tripled for diesel, from about 10 to 35 cents a litre since February, and risen from 4 to 23 cents for gasoline, as refinery outages remove processing capacity. That is the mechanism linking headline oil prices to today's Slovenian diesel increase.

Inside the Refining Squeeze: Record Premiums, Shut Plants and the Refiners Cashing In

Why Diesel Is Outpacing Crude: The Refining Shortage

The ECB analysis separates two drivers of pump prices: the price of crude and the cost of turning it into fuel. Since February, crude has fallen well off its April peak, yet diesel at European pumps has stayed high — because the processing step has become the bottleneck. The IEA reports that global refinery throughput in June ran 6 million barrels a day below a year earlier, and the biggest losses are in the Middle East: Saudi Arabia's Jizan refinery, with 400,000 barrels a day of capacity and recent exports of about 200,000 barrels a day of products, mainly diesel, has been halted since 27 July after a Houthi attack, while Kuwait's Al-Zour plant, which can process 615,000 barrels a day, is only partially running, with a restart expected in the coming days. Russia, meanwhile, has banned fuel exports after Ukrainian strikes on its refineries, removing another source of supply for a European market that no longer buys Russian crude under EU sanctions.

These are verified facts from the IEA and the ECB analysis. The interpretation is that diesel is the most exposed product: Jizan exports mainly diesel, Russia's ban covers fuels including diesel, and demand has not fallen. The market's verdict is visible in the numbers — Reuters reported the European diesel premium, the difference between diesel and crude, hit a record $74.66 a barrel last Thursday. In effect, the scarce, expensive part of the barrel is now the refining, not the crude.

Who Gains and Who Pays

The beneficiaries are straightforward: refiners with working capacity. The ECB notes the margin increase is revenue for oil companies such as Total, Chevron and Exxon, which have reported high — some record — second-quarter profits. The payers are households and fuel-intensive businesses. In Slovenia, where pump prices are regulated and adjusted weekly, diesel has risen for five consecutive weeks — a managed but clear passthrough of the margin squeeze.

Interpretation, clearly separated from the facts: this combination — record refining profits alongside visibly higher consumer fuel costs — is politically sensitive. That sensitivity is already visible in Russia's export ban and in Slovenia's regulated pricing model; whether governments respond with further intervention is a question the data does not answer.

How Long the Squeeze Lasts — and What Would End It

On timing, there is decent evidence. Futures prices cited by the ECB point to margins climbing further in August before starting to fall, and the IEA expects worldwide refining volumes in 2026 to come in below last year's level, with a recovery only the year after. The base case is an elevated-margin summer, not an immediate return to normal price levels.

The swing factors are the things the forecasts cannot fix: when Jizan restarts, whether Al-Zour's restart proceeds as planned, and whether Russia's export ban is lifted. Each is an event to watch rather than a development we can predict with confidence.

What Drivers and Fuel-Heavy Businesses Should Budget for in August

For households and fuel-dependent businesses, August looks like a month of continued price pressure. The specific signals to act on:

• Expect possible further diesel increases: futures cited by the ECB point to refining margins rising again in August, and Slovenian diesel has already risen five consecutive weeks. A sixth increase is a realistic scenario, not speculation.
• Skip motorway stations where possible: highway diesel (about €2 a litre) and gasoline (about €1.8 a litre) cost roughly 12 and 24 cents more per litre than regulated off-highway prices of €1.882 and €1.5583 respectively — on a 50-litre tank, that is €6 to €12 per fill.
• Track refinery restarts rather than crude headlines: the first signal to watch is the planned restart of Kuwait's Al-Zour refinery in the coming days. A return would relieve the diesel margin that currently accounts for roughly 35 cents of every litre.
• Fuel-intensive businesses should price in August costs: with June global refining throughput 6 million barrels a day below last year and the European diesel premium at a record $74.66 a barrel, input costs look set to stay elevated through the month.
• Understand why pump prices lag crude falls: the refining margin component for diesel has tripled since February, from about 10 to 35 cents a litre, so even if crude declines, only part of that drop reaches the pump while processing capacity stays tight.