Low Rhine water levels push German fuel prices higher

Record-low water levels on the Rhine have driven up fuel prices in parts of Germany and disrupted other inland waterway freight, putting additional pressure on the country’s economy, ERR reported.

In July, petrol cost 11 cents more per litre in western Germany than in the south and southwest, while the difference for diesel was 10 cents, according to the national competition authority. Rising transport costs caused by the Rhine’s falling water level were cited as the reason.

Germany’s longest river is an important shipping route, but barges can currently carry only one-fifth of their usual cargo. The reduced loads are intended to prevent vessels from running aground as the riverbed comes much closer to their keels.

“Because of the low water level, vessels can no longer sail with full loads. So, if you want to transport the same amount of goods, you need more vessels carrying lighter loads. That naturally makes transport more expensive and complicated,” said Marcus Erdmann, head of Germany’s waterways and shipping authority.

Freight rates have tripled in a month. At the end of June, transporting fuel from Rotterdam to Karlsruhe cost 45 euros per tonne. By Tuesday, the price had risen to 160 euros.

Andreas Grzib, a board member of Germany’s inland waterway transport association, told ZDF that consumers would feel the higher freight costs differently depending on the product.

“As consumers, we feel the effects more directly when the products being transported are closely linked to raw materials. If we are talking about petrol, diesel or aviation fuel, we cannot rule out experiencing the kind of fuel shortage seen at filling stations in 2018 again,” Grzib said.

He added that the farther a product is from its raw material, the longer it takes for higher transport costs to pass through production chains and reach consumer prices.

The Kaub measuring station in western Germany, near the Cologne-Bonn lowland, marks the Rhine’s lowest level. The reading is used to assess how heavily loaded vessels can be to pass along the river. On Tuesday, the water level reached 24 centimetres above the so-called zero mark, breaking a record set eight years ago. It is forecast to fall to 17 centimetres by Friday.

The zero mark is not at the riverbed but slightly more than a metre above it.

Exceptionally hot summer weather is one reason for the decline, but not the only one, Erdmann said. Experts have observed that periods of low water have become more frequent since the early 2000s.

Heatwaves and droughts affect river levels. In addition, melting snow, which normally supplies the Rhine with water from the Alps until early summer, has decreased in recent years. Erdmann said the combination of these factors had produced the current low water level.

The unexpected rise in fuel and other freight costs is putting pressure on German industry and the wider economy, which has only just begun to recover. Grzib said traders were looking for alternative transport options because the increase in costs was so large.

Companies are working with customers on measures including temporary storage, he said. Some customers are abandoning freight transport temporarily and waiting for water conditions to improve, while others have found alternative routes and arranged deliveries in different ways.

Germany’s new transport minister, Steffen Bilger, has called a crisis meeting with business representatives and experts for Thursday.