Fuels: "we will remain in high oil prices" warns the UFIP

This is one of the big issues for this 2023-2024 school year, the price of fuel which is reaching new heights. To be completely precise, the situation deteriorated during the summer. To find out if the situation could possibly improve in the days and weeks to come, we spoke with Olivier Gantois, president of UFIP Energies et Mobilités. His vision of the situation is unfortunately not very optimistic…

“We are going to stay with high oil prices, we must not delude ourselves”

Why are fuel prices increasing again?

Between the beginning of July and Monday this week (September 4, editor’s note), the price of a barrel rose from 76 to 86 dollars. At the same time, fuel prices at the pump increased by 15 cents on SP95 and by 19 cents on diesel. The increase in the price of a barrel explains half of the increase in prices at the pump.
The second reason is that the price of finished petroleum products, set in Europe by the Rotterdam quotations, has risen more than the price of crude oil. Usually, when crude goes up, commodities go up in the same way. There, there was a greater increase in the latter compared to crude. This is explained by the war in Ukraine, the limitation of production in Russia and Saudi Arabia because they are afraid that there will be surpluses and that this will lower prices.
The reason for the increase in finished products also comes from technical problems at refineries in Europe, which reduced their production. We have also been in hurricane season for 10 days in the Gulf of Mexico. There is therefore a fear that the oil infrastructure located in this area will be impacted and will have to stop. The drop in stock levels in the USA also played a role. All of this at the same time was enough to lead to a relatively sudden increase in prices, which we do not know if it will last.

Sometimes, increases are due to decisions taken in France but this is not the case. Here, it is the consumer who suffers from this, and we will continue to experience high oil prices. We must not deceive ourselves. At the start of the summer, the price of a barrel was $76, which is already high. In terms of price at the pump, we were at €1.81/L for unleaded and €1.67/L for diesel. These are high prices.

“France cannot change anything about that”

What can we do in France in the face of rising prices?

France has no influence on prices, it does not represent enough volume (1%) to be able to influence prices. We have to pay this price, France cannot change anything about that.

The world consumed 101 million barrels per day. At the end of the year, we will be around 103 million barrels per day. This increases by one to two million barrels per day each year. The context is a very strong and growing demand for petroleum products, which is not likely to calm prices. Normally, it will decline but it will be around 2028-2030, with a peak at 108 million barrels per day according to the International Energy Agency (IEA). Then it would have to decline by at least a million barrels per day each year.

“There were no discussions” with the State

Would a discount be a good idea?

We could consider that this is not very virtuous, with regard to our desire to reduce dependence on fossil fuels. If when prices increase, we put in place discounts, that will not necessarily help with this transition. But the state does what it wants. The distributors themselves also make isolated and personal arrangements.
Last year, we worked with state services for several weeks to set up the discount systems. There, what we understood straight away was that the State ruled out this hypothesis. So there were no discussions.

Why are E85 and LPG less impacted?

This is because they are taxed less. On diesel on Monday, we had 92 cents of tax (per liter), or 49%. On unleaded, this was €1.02 tax, or 52% of the price including tax. On superethanol and LPG, taxes are lower. Taxes, which are quasi-fixed, act as a shock absorber for changes in the prices of petroleum products. On superehanol and LPG, as there is less tax, the increase was less felt. It’s just a question of tax weight.

Comments collected by Sylvain Gauthier

Also read on Auto-Moto.com:

Lancia: things are becoming clearer for its return to France in 2024

The popular Citroëns, we are not quite there yet

VAT offered for the purchase of tires at Point S in September and October