will the rise in prices at the pump stop?

2023-08-18 10:51:00

Since the beginning of the summer, the addition is salty for motorists. But the trend might be reversed in a few weeks. Decryption.

By Philippine Robert

Published on 08/18/2023 at 12:51 p.m.

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Chis year, the holidays will have weighed heavily in the wallets of the French… And even on the way home! For the people of August, grimace soup is likely to be in order until the last passage at the pump. Since the beginning of July, the price of fuel has indeed resumed its flight.

At the last score, the liter of diesel was displayed at 1.83 euro (+ 17 cents since the end of June), and that of gasoline at 1.90 euro (+ 7 cents). The only good news is that we have not yet reached the peaks of 2022, when fuel easily exceeded the 2 euro mark in all four corners of France… And this overheating might subside in a few weeks.

A strong demand

To understand the summer increase in prices at the pump, we must not look at taxes or distributor costs and margins, but rather at the raw material. “The price of crude oil on the international market soared: between the end of June and August 9, the price of a barrel of Brent rose by nearly 21%”, explains Francis Perrin, associate researcher at the Policy Center for the New South and research director at Iris.

READ ALSOWill the Brics supplant the West?

An explosive cocktail is at the origin of this explosion. On the one hand, a rather vigorous demand for oil, thanks to a world economy which is doing much better than expected in 2023. Last July, the International Monetary Fund (IMF) also revised its forecast for world growth to 3 %, compared to 2.8% previously. “We are also going to beat a record for global oil demand this year,” emphasizes Francis Perrin.

The effect of sanctions

On the supply side, the time is rather for scarcity. Several producers of OPEC + (the Organization of the Petroleum Exporting Countries and ten other states, which represent nearly 50% of world production), and in the first place Saudi Arabia, have indeed decided to lower their production. to boost prices. Oil stocks are also down. And the effect of the sanctions on Russian petroleum products is beginning to be felt, with a drop in the volume of their exports.

READ ALSOSaudi Arabia ‘will continue to extract fossils following 2100’ In recent days, however, the movement has been reversed, and the price of oil is starting to take a nosedive. Concerns regarding China’s economic health – following the release of a series of disappointing economic indicators and the stock market tremors rocking property developer Country Garden – have indeed led to a bearish movement in the markets. Beijing is indeed the world’s largest importer of black gold.

What will reduce prices at the pump in a few weeks? “It all depends on the duration of the fall in the price of oil: if it only lasts a few days, that will not be enough, it would have to continue for quite a long time”, predicts Francis Perrin. See you in the fall!

READ ALSO“China is doing everything to hide a structural economic slowdown”

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