BARREL PRICE. The surge in the price of a barrel of oil poses a new threat of rising prices at the pump in France. Price per barrel, impact on your full, strategic stocks… We tell you everything.
The war in Ukraine has direct consequences for Europe and France. As with every major episode of geopolitical tension, the price of a barrel of crude oil, known as “Brent” jumped from the first minutes of the Russian invasion on Ukrainian soil. The prices of fuel being strongly indexed to the price of a barrel of oil, which exceeded 100 dollars on the first day of the war on Thursday February 24 (a first since 2014), a rise in prices at the pump is therefore to be expected in the coming days in French service stations. How far can the increase go, how dependent is France on Russian oil and what are the firewalls to counter a possible Russian sanction and a surge in prices? Here are some answers.
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 has reached the fateful bar of 100,00 dollars this Tuesday, March 1at 8h24.
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.
The price at the pump might therefore increase two to three cents in the coming days, compared to current prices. 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 regarding. The increase should therefore take place at the end of the week, or the beginning of next week. 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.
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 might 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 might 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 might 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 following Hurricane Katrina in the United States.