Danish gas station sales fall for third month amid high fuel prices

Danish gas stations selling liquid fuels have experienced a sales slump for the third month running. Data from Statistics Denmark reveals a 7.1% decrease in sales from April to May, once price fluctuations and seasonal variations are accounted for.

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In nominal terms, 23 percent more money is being spent at gas stations compared to February, which is due to fuel prices rising quite noticeably in the period.

This downturn is closely linked to the conflict in the Middle East, which previously sent fuel prices soaring. While nominal spending at gas stations has increased by 23% since February due to higher prices, the actual volume of fuel purchased has dropped by 18% in the same period. Brian Friis Helmer, a private economist at AL Sydbank, noted this significant real consumption decrease.

Despite the decline in fuel sales, the broader Danish retail sector showed resilience. Overall retail sales grew by 1.0% from April to May. Morten Granzau, vice director at Dansk Industri, attributed this growth to high employment, rising real wages, and a lower electricity tax, which collectively put more money in consumers' pockets.

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But adjusting for price changes and seasonal fluctuations, the real consumption at gas stations has fallen by 18 percent since February.

The surge in fuel prices began in late February following an escalation of conflict involving Iran. Disruptions to shipping traffic through the Strait of Hormuz, a critical global oil transit route, contributed to price volatility. Although oil prices have since fallen from a peak of around $122 per barrel to $76, the earlier price shock appears to have impacted consumer behavior at the pump.

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The high employment, the increase in real wages, and the lower electricity tax ensure customers in the stores who have more money in their hands.