Energy Markets at War: The Effect of the Russian Invasion of Ukraine on Refinery Margins

Leonard Gregor and Justus Haucap

No 12553, CESifo Working Paper Series from CESifo

Abstract: This paper evaluates the effect of the Russian invasion of Ukraine in February 2022 on refinery margins, i.e. the difference between wholesale prices for road fuels (gasoline and diesel) and oil prices in Europe and Germany in particular. Following the Russian invasion of Ukraine, wholesale road fuel prices net of taxes rose by more than 50 cents per liter, whereas crude oil prices increased by only about 30 cents per liter. Using a difference-in-differences framework, we compare refinery margins in Germany with those on the Amsterdam–Rotterdam–Antwerp (ARA) spot market, which serves as a European benchmark price. The results indicate that refinery margins in Germany increased by approximately 5–6 cents per liter relative to the ARA region after the invasion. We attribute this differential primarily to Germany’s strong dependence on Russian Ural crude oil imports and to the presence of regional market power among German refineries. We further document substantial heterogeneity in treatment effects across both time and regions. In addition, the invasion was associated with a significant decline in fuel demand, with gasoline consumption falling by about 13% and diesel consumption by approximately 9%.

Keywords: event study; Ukraine crisis; fuel prices; wholesale markets (search for similar items in EconPapers)
JEL-codes: C33 G14 H56 L13 L71 Q41 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-com
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ifo.de/DocDL/cesifo1_wp12553.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12553

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().