Rising Fuel Prices: Impact on Consumers and Strategies for Cost Savings

2023-08-06 13:09:58

In recent weeks, the fuel prices kept increasing. The liter of Diesel thus exceeded the 1,905 euro last week, being the price for the month of November 2022 as the energy crisis raged. In only 2 monthsthe price of a 50 liter tank of Diesel has thus increased by 11.5 euros on average. This situation of increase is the result of the economic recovery globally as well as the holiday period where demand is traditionally higher.

That said, whilewe expected a drop in prices from the month of septemberit might be that the rise continues, and this for many reasons. Asked by the newspaper L’Écho, the Brafco (the Belgian Federation of fuel and fuel traders) points out the weakness of the euro once morest the dollar, which means that we buy our fuels more expensive given the disadvantageous exchange rate – purchases are made exclusively in dollars. If the euro continues to show weakness, it means that prices will not come back down.

Advertisement – ​​continue reading below

OPEC wants to drive up prices

But there is one other reason to the high price of oil: the will of theOPEC (the organization of the petroleum exporting countries) of close the floodgates a little (1 million barrels per day) in order to maintain higher prices (and therefore more profitable on the markets). This logic is also that pursued by the Russia during this month of August. Moscow has indeed reduced its production by 500,000 barrels per day (1.5% of world demand) to raise prices and be able to finance themselves better. All this obviously contributes to the rise in prices.

Furthermore, the UNITED STATES know a good economic recovery, such as India. across the Atlantic, the GDP is 2.4% growth whereas it was expected to fall by 1.7%. Result: oil consumption is on the rise once more, which means that the USA has less oil available to supply its trading partners, including Europe. Moreover, the Americans have also drawn on their strategic reserves in recent months, which therefore requires today to reconstitute them, which logically deprives the market of a certain number of barrels.

Optimism for the start of the school year?

According to Brafcowe must remain optimistic pour September 2023. In fact, currently the gun is exchanged around 80-85 dollarsa level considered profitable enough for exporting countries. The latter will probably not take the risk of increasing the pressure, at the risk of ( once more) seeing demand collapse. And the prices too.

The Federation also thinks that market equilibrium should allow the price to decrease slightly at the start of the school year with a liter of Diesel around 1.75 euro/l. Possible, but it is just as likely that prices will remain similar to today. Lonely, Poutine might, for example, decide to reduce its production a little more to increase its income and finance its war in Ukraine. To see then. The Belgian government always has the reverse ratchet mechanism just like that of the flat-rate excise duty reduction. But he is unlikely that he resorts in the coming weeks to these protection tools of the consumer.

What will your next vehicle be?

1691330600
#fuel #prices #skyrocket # once more..