Fuel: How far will the drop in gasoline and diesel prices go in France? – 20 minutes

Since their record peak seven weeks ago, fuel prices have begun a steady decline. Week after week, the prices per liter of gasoline and diesel have lost a few cents. According to the monitoring of the Ministry of Ecological Transition, Friday August 5, the average price of diesel was 1.83 euros / l, or 3.9 cents less than last week. For the Super SP95-E10, the drop in seven days was 1.4 cents, with a price at the pump displayed at 1.79 euros per liter on average. While the now eagerly awaited monthly forecasts of the Organization of the Petroleum Exporting Countries (OPEC) are published this Thursday, 20 Minutes explains why and how fuel prices vary and have not finished making the roller coaster. Why Are the prices falling? Several factors are behind this slow fall. First, if it’s falling, it’s because it exploded with the war in Ukraine. The announcement of an embargo on Russian oil sent shivers through a particularly volatile market. Then, if it has not gone up, it is partly thanks to the discount of 15 euro cents per liter of gasoline at the pump introduced exceptionally by the government. This was extended until August 31, suddenly, for the moment, it does not go up! Third reason, the fall in the price of Brent, this deposit located in the North Sea whose price per barrel is used to fix the amount of crude oil on the stock markets of quite a few people. “The price of spot Brent fell by $22/b between June 17 ($127/b) and August 5 ($105/b), reaching its lowest level in almost six months,” says 20 Minutes the Ministry of Ecological Transition. The reduction in its cost is explained “by the agreements between the producing countries of OPEC to increase their production”, indicates Carine Sebi, economist and coordinator of the Energy for society chair at the Grenoble school of management. expert finally advances a fourth factor: “the reduction of the margin made in the refineries between the price of crude oil and the refined product”. Here again, the Ministry for Ecological Transition monitored the evolution of the refining margin on Brent, which was at 33 euros per tonne the week of January 7, to reach a peak of 193 euros the week of April 29 and rise now at 62 euros per ton. The ministry explains this gradual reduction in refining margins by “the volatility of crude oil prices, the increase in refinery production and the drop in demand for gasoline”. How long will this last? almost sure, this drop will not last forever (otherwise the gasoline would end up being free). This could end shortly after the start of the school year. For Carine Sebi, if the government plans to double the discount at the pump in September and October, “it is because it anticipates an increase in this very sensitive market”. And sensitive to the smallest movements: one-off ones such as “China’s expected economic recovery which will increase demand and tighten the market”, but also seasonal ones such as “the arrival of winter and countries’ needs for oil to heat, “says the economist. For its part, the Ministry of Ecological Transition is concerned about “the impact of the economic sanctions taken against Russia, the production difficulties of OPEC + member countries , or even the anticipation of an imbalance in the oil market at the end of 2023 according to the International Energy Agency (IEA)”. Could we see the same records again as last May? For Carine Sebi, it’s not at all impossible. “With its discount, the State is trying to take the pill, but until when? asks the woman for whom the government is unfortunately doing the opposite of what it should be doing. “With this aid, we are investing in hydrocarbons instead of using the money for non-emitting alternatives that would allow us to overcome this dependence on hydrocarbons”. Conclusion, the day the State will no longer be able to get their hands on the wallet, the backlash at the pump is likely to hurt.