BARREL PRICE. The price of a barrel of Brent continues to soar this Thursday, March 24 with a level not reached for almost two weeks. Should we fear an increase in the price at the pump in France? We take stock.
[Mis à jour le 24 mars 2022 à 11h121] $120. This is the price of a barrel of Brent oil on Thursday morning, and its price continues to rise throughout the morning. It was enough to seriously worry the International Energy Agency (IEA). The organization didn’t mince words this week when talking about a “global oil supply shock“probable in the weeks to come. And for good reason, the barrel of Brent had not reached this level for two weeks, after having come close to its historic record at the beginning of March. Faced with the risk of soaring prices at the pump which is watching French and European households, the continental institution has published a list of 10 measurements directly applicable and supposed to reduce our oil consumption. Initiatives mainly centered on transport. We note in particular the desire to lower the speed on motorways by 10 km/h, to set up alternating traffic in the city or even to maximize the use of trains to the detriment of the plane, and to massively develop night trains.
In the face of the emerging global energy crisis set off by Russias invasion of Ukraine, our new 10 Point Plan to Cut Oil Use proposes actions to
ease market strains
reduce the price of bread being felt by consumers
lessen the economic damageMore: https://t.co/N5PGzJLbnS pic.twitter.com/K2dTpf0BRv
— Fatih Birol (@fbirol) March 18, 2022
Faced with the unprecedented increase in the barrel of oil last week, close to 140 euros per barrel, AIE member countries should release no less than 60 million barrels of oil of their reserves. One objective, to stabilize a market in panic. So, should we expect a further rise in fuel prices in France, when the prices charged have already reached record highs? As fuel prices are strongly indexed to the price of a barrel of oil, a further rise in pump prices is to be expected despite the new aid measure put in place by the government. French consumers could well be the first victims of a potential embargo. Difficult for Europe to turn around quickly, alternatives are possible, but they will take time before being put in place. In France, the price of a liter of diesel has fallen below 2 euros, on average, throughout the territory (1.97 euros per liter). But like the first outbreak in early March, the repercussions at the pump should be heavy. Remember that the effect in France of the rise in the cost of European oil is felt after about 8 to 10 days, it is the time of the real repercussion. Soaring fuel prices with a liter of diesel at 2.25 could therefore return in the coming weeks in France if the price of a barrel of Brent does not come down significantly enough.
Since the start of the week, we have seen a small respite with relative stagnation in prices. They dropped back below 100 dollars at the start of the week before rising again significantly. Prime Minister Jean Castex announced two fuel aids on Wednesday March 16 during the press conference presenting the resilience plan. First, a discount of 15 cents on fuel for all French people from April 1 and for 4 months. Then, more help from 35 cents per liter of fuel fishing for fishermen hard hit by the price explosion. Aid valid from April 17 to July 31 to allow them to go back to sea in decent conditions.
- March 7, 2022: $139 the barrel
- March 8, 2022: $128 the barrel
- March 10, 2022: $110 the barrel
- March 15, 2022: $98 the barrel
- March 16, 2022: $100 the barrel
- March 17, 2022: $106 the barrel
- March 18, 2022: $109 the barrel
- March 21, 2022: $111 the barrel
- March 22, 2022: $118 the barrel
- March 23, 2022: $116 the barrel
- March 24, 2022: $120 the barrel
The war in Ukraine casts doubt on the supply and price of energy. Aside from gas, one question remains central and arouses curiosity, what is the price per barrel of oil in this mess? Rising almost constantly since December 2021, the price of a barrel is now stable around 100 dollars, measured exactly at 120 dollars this Thursday, March 24.
When you fill up with gas, the taxes represent 60% full. And these taxes, they, in spite of the war in Ukraine, fluctuate rather little. In particular the domestic consumption tax on energy products (TICPE), which simply represents the fourth revenue of the State, behind VAT, income tax and corporate tax. the fuel price leaving the refinery, it corresponds to 1/3 full of gasoline. Notably influenced by the price of a barrel of oil on international markets. Gas station attendants will have no choice but to pass on this increase to the price per litre.
Keep in mind that there is a lag time between the increase in the purchase price of a barrel of oil and the real impact on prices at the pump. This time varies 8 to 10 days about. In an attempt to curb this phenomenon, several aids have been put in place and distributed by the Government. In particular the inflation bonus granted to 38 million low-income households, as well as the revaluation of the mileage scale for 2.5 million tax households. The threat of a embargo European on Russian gas could cause the price of a barrel of oil to explode at $300or even more.
According to INSEE, the Russia is the 3rd world producer of oil with 10 million barrels per day, of which 2 million transit to Europe. The Franceshe matters 9% of its crude oil since Russia. And the countries which could substitute the major role of Russia in the export of oil are not legion. Nigeria, Angola and Libya, for example, are not even meeting their own production targets. the Nigeria (9.6% of oil imports in France), theAlgeria (10.3%), and theSaudi Arabia (11.8%) remain crucial trading partners for France to whom the government could turn more to supply the country.
“We have significant strategic oil stocks which cover almost three months of consumption and allow us to deal with supply disruptions. The French are not at risk of running out of fuel or gas for heating in the coming months” declared the Minister for the Ecological Transition, Barbara Pompili on February 23. The European Union could even decide to release part of its strategic oil stocks to counter the rise in fuel prices in the face of this major market disruption. A decision taken only three times in history, for example after Hurricane Katrina in the United States.