IPrices at the pump soared to pass the symbolic bar of 2 euros on average last week, before falling back on Monday. This very high volatility prompted the government to announce aid of 15 centimes per liter in April.
Price at the pump: the average of 2 euros spent
Fuel prices have climbed for weeks, flying from record to record in the wake of crude oil prices, and exceeding 2 euros on average last week: unheard of.
A liter of diesel was worth 2.1407 euros on average, an increase of around 40 cents in two weeks, according to the latest official weekly figures as of Friday.
Prices rose in the wake of oil prices, rising with the global economic recovery, the still limited supply from the major producing countries and lately the uncertainties linked to the war in Ukraine. Added to this are other factors, such as the euro/dollar exchange rate (oil being traded in the American currency).
Diesel oil has risen even more than other fuels because Russia is a major producer of this product, of which France is particularly fond. Even if the energy sector is not under sanctions in Europe, the oil sector has already sought alternatives to Russian products.
“The market is already in the process of reorganizing and in particular abandoning Russian diesel, hence the considerable increases”, explained last week Olivier Gantois, president of Ufip Energies and mobilities (former French Union of Petroleum Industries) .
Reflux this week
But after this surge until last week, professionals observed a significant drop on Monday, in a context of high volatility.
“We have a drop of 8 to 10 cents on unleaded and 30 to 32 cents on diesel at the pumps this Monday,” said AFP Francis Pousse, national president of fuel and new energy distributors at Mobilians (ex-CNPA ), which represents 5,800 service stations.
Oil prices have indeed fallen in the second part of last week, a trend that accelerated on Monday against a backdrop of relative optimism about a possible outcome of the Russian-Ukrainian talks.
“All the traditional service stations played the game well from last Thursday: with us the drop was effective every day depending on the rate of supply”, observed Francis Pousse.
Aid of 15 cents in April
Jean Castex announced on Saturday a “discount at the pump of 15 cents per liter” for all fuels, from April 1 and for four months.
This measure, which will cost the state around 2 billion euros, concerns individuals and businesses, said the Prime Minister in an interview with Le Parisien.
Concretely, the price displayed in the stations and on the pumps will not include this discount: it will be up to the distributors to apply the discount at the checkout, which will therefore reach 7.50 euros for a 50 liter of fuel. The State will then reimburse the distributors.
In addition, the government is preparing targeted measures to help “big rollers” to pay for their gasoline this summer.
“The goal is that by July 31, we have put in place a measure which will affect those who are the most dependent, the big rollers”, specified the Minister for the Ecological Transition, Barbara Pompili.
A helping hand from distributors?
Jean Castex also called on distributors and oil groups to make “an additional gesture” themselves, giving the example of a rebate of 5 cents which could be granted.
“We are discussing with them to see what efforts they can make,” added Ms. Pompili on Monday.
But the professionals, starting with Ufip Energies and Mobility, ensure that the distributors only make around one cent per liter of profit.
“It’s a loss leader on which there is no margin, or a tiny margin, of the order of 1 cent, 1.5 cents”, confirms the spokesperson for System U, Thierry Desouches. “Five cents, we are not able to get them out”.
On the retail side, it is recalled that brands are already selling fuel “at cost price”.
03/14/2022 18:09:39 – Paris (AFP) – © 2022 AFP