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Nerd Cheat Sheet: Gasoline Pool Working Residual Model
Gasoline prices have experienced extraordinary fluctuations since 2020. The unusually low pump prices during the Covid-19 disruption are largely behind us. Subsequent price increases associated with recovering demand, Russia’s invasion of Ukraine and the 2026 conflict involving Iran, Israel and the United States have repeatedly brought gasoline prices back into public and political attention.
The state also has an interest in what happens at the pump.
Then, on Saturday, 28 February 2026, the United States and Israel launched the opening strikes of the 2026 conflict..
By 4 March, just four days later, ABC was reporting petrol-price surges and queues in Australia. The Australasian Convenience and Petroleum Marketers Association cautioned that most Australian oil supply came via Singapore and said the physical lag was “up to two weeks”, so it was too early for the new conflict itself to have physically worked through the supply chain.
At first sight, Supply and Demand again seemed not to make sense.
Was the private sector taking advantage of a bad situation at the expense of the motorist and the state?
Modern society requires public revenue to support the systems described elsewhere in Relativity and Reaction as Life Support. Fuel taxation contributes to that revenue.
During the comparatively stable July observations from 2023 to 2025, the model used in this investigation estimates that the state-derived component represented approximately 56% to 63% of the German E10 pump price.
Where that revenue is collected is a political choice with consequences. If fuel taxation were reduced while the same overall level of public revenue were to be maintained, the difference would ultimately need to be accommodated elsewhere through taxation, expenditure, borrowing or some combination of them.
For many motorists gasoline is also not a discretionary purchase comparable with a cinema ticket or the latest smartphone. In the short term it can be a practical necessity with limited alternatives.
Large increases in pump price therefore produce a deceptively simple question:
Who’s Cooking the Books with Gasoline?
Or, more cautiously:
Where did the additional money go?
That question starts the investigation.
Who’s Cooking the Books with Gasoline?
Looking only at the German E10 pump price identifies something unusual.
The July 2026 pump-price increase was substantially larger than the corresponding increase during the 2022 disturbance, despite a smaller increase in the modelled non-state price components.
Part of the explanation is that the 2022 disturbance was temporarily masked at the pump by a reduction in Energiesteuer.
But that does not explain everything.
Picky and Choosy
Looking only at E10 is itself too narrow.
A refinery does not manufacture gasoline independently from all its other products. Gasoline and petrochemical naphtha share parts of the same wider refinery system.
Expanding the frame substantially reduces the apparent Working Residual — but it does not make the two disturbances more alike. The contrast between 2022 and 2026 becomes more pronounced.
The Grass Is Greener
Perhaps Germany is simply different?
Expanding the frame again to six connected European gasoline markets suggests otherwise.
Between July 2024 and July 2026, the modelled Brent contribution fell slightly, while the Gasoline Pool Working Residual increased in all six countries examined.
National taxation substantially changed what motorists eventually experienced at the pump, but the underlying movement was not confined to Germany.
Supply and Demand
Actual or anticipated short supply changes behaviour.
Buyers attempt to secure supply. Sellers manage inventories, commitments and replacement costs. Contracts, futures, logistics and expectations mean that market value can begin changing before the physical product itself has moved.
The molecules may take days or weeks to arrive. The change in value can begin immediately.
When the Wind Blows
That creates another problem.
Additional value appearing somewhere in the supply chain does not automatically equal additional company profit.
And additional company profit does not automatically equal taxable profit in Germany.
Oil companies operate across countries, facilities, products and legal entities. Long-term purchase and sales contracts, changing inventory values, facility utilisation, logistics, hedging and the cost of managing a disruption all influence where money ultimately accumulates.
Finding the additional value is therefore only the beginning.
Good Intentions and the Shifting of Influence
Government can deliberately influence one part of the gasoline price through taxation and CO₂ pricing.
It cannot directly control the complete market-generated price signal.
The investigation therefore asks what happens when the market itself generates a price movement substantially larger than the policy signal the state intended to introduce progressively.
It also considers a windfall-tax thought experiment intended to establish an order of magnitude. Using deliberately simple assumptions, the calculation produces approximately €1 billion per year if the July 2026 conditions are assumed to persist for a full year.
That is a substantial amount of money.
It is also only about 0.06% of the €1.6 trillion orientation value used elsewhere in Relativity and Reaction for the total German state burden. That does not make €1 billion insignificant. It establishes the scale of the potential intervention relative to wider German state finances.
The important question therefore becomes not simply:
Can it be taxed?
but:
What is the intervention intended to achieve?
Questions for Policy
The investigation therefore ends, for the moment, not with an accusation but with three questions:
- Do German institutions have sufficient information and authority to identify the root causes of exceptional gasoline-price movements?
- If excess profit is identified, can it be attributed and taxed effectively within German and/or EU jurisdiction?
- What is the objective of gasoline taxation during the 2026 Strait of Hormuz disruption, and how well do the available tax instruments address the prevailing cost drivers?
These questions have been sent to political representatives and organisations for comment. Their responses can subsequently form the basis of Clarification and Closure.
Author’s Note — Method, Sources and AI Assistance
This investigation was developed from the author’s own research question, engineering experience, analytical framework and interpretation of the results.
The underlying model, its system boundaries, scenario definitions and the decision to examine the gasoline price from progressively wider perspectives were developed by the author. The calculations are intended primarily to identify trends, relationships and orders of magnitude rather than to reproduce the detailed commercial accounts of individual companies.
Generative AI, principally ChatGPT, was used extensively as a research and editorial assistant. Its role included locating and comparing sources, checking factual claims and calculations for plausibility, challenging assumptions, identifying possible alternative interpretations, moderating statements where the available evidence did not justify stronger conclusions, and assisting with the structure and clarity of the final text.
AI-generated suggestions were not accepted automatically. The author developed and selected the analytical approach, determined the model assumptions, evaluated the results and remains responsible for the conclusions presented.
Where the available information does not establish causation, profit, ownership of value or tax liability, the text deliberately distinguishes observation from inference.
ere did the Windfall Fall?
📖 Supporting Sections
- Who’s Cooking the Books with Gasoline? 18.09.2026
- Picky and Choosy 20.09.2026)
- The Grass is Greener (Forthcoming)
- Supply and Demand (Forthcomming)
- When the Wind Blows TBD (Forthcoming)
- Good Intentions and the Shifting of Influence (Forthcoming)
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Nerd Cheat Sheet: Gasoline Pool Working Residual Model
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