The president of System U, Dominique Schelcher, had already planned it a few days ago. Last Thursday he sounded the alarm at RMC about “a sudden increase in fuel in the coming days”. The day before, it was the French Union of Petroleum Industries (Ufip) that had warned of a likely risk of price hikes at the pump “by a few cents per litre”, when “we were already at historic highs”.
As he spoke, the curves were already sharp uphill. Especially for diesel. According to weekly data from the Ministry of Ecological Transition that stopped Friday, the price of diesel rose on average 14 cents per liter in one week. The liter of diesel was therefore worth an average of 1.8831 euros (+14.16 cents over a week) and that of super SP 95 1.8889 euros (+7.56 cents),
And the increase will continue given the sharp rise in oil prices. On Sunday, Brent’s price was close to $140 a barrel, not far from the July 2008 record ($147).
Rising fuel prices, which have been hitting new highs for weeks, are fueled by the global economic recovery and the still limited supply from major oil-producing countries. This trend has worsened since the beginning of the Russian invasion of Ukraine last week. Even though Russian oil is theoretically exempt from sanctions for the time being, Russian exports can no longer find buyers, Shell is one of the few that has put it at risk this week. He may also be affected by the sanctions. Antony Blinken, the head of US diplomacy, said on Sunday that the United States and the European Union were “very active” in talks about the possibility of banning Russian oil imports.
Gas prices also continue to rise, more than 270 euros per MWH.
The “bill won’t be painless for the French”
The bill will not be “painless”, as the French had already warned the Minister of Ecological Transition Barbara Pompili on France Info on Friday. For households, the bill can also be high, especially for fuel prices. Their energy consumption could increase by €400 to €2,800 this year, according to an assessment by credit insurer Euler Hermes.
In response, not “whatever it takes” in 2022 to help French households bear the rise in energy prices, but a boost to €22 billion. The Minister of Economic Affairs indeed reported this on Monday 7 March on RMC/BFM TV. Bruno Le Maire thus explained that the gas price freeze would have to cost “probably 10 billion euros over the whole of 2022”, against EUR 1.2 billion budgeted to date. “Capping Electricity Tariffs” in turn has costs ‘8 billion euros and inflation compensation 4 billion euros’†
“The total bill is more than 20 billion euros to the sole protection of our compatriots against rising energy prices”, Bruno Le Maire indicated, specifying that the government is ready to take action ” further “ measures to support the purchasing power of households. They will be answers, if necessary “directed”. “We are not responding to a major geopolitical turning point by paying a check here or there,” he warned, citing the Russian offensive in Ukraine launched at the end of February that exacerbated the rise in energy prices.
Rising Pump Prices in California
Prices are also exploding at the pump in the United States. In California, the price of regular gasoline at the pump broke a historic and symbolic record in California on Friday: an average of more than $5 per gallon (3.78 liters). This price, which is equivalent to about $1.34 per liter (1.23 euros), would make any European motorist smile (the average in France was about 1.90 euros per liter), but it can shake the spirits in the United States. States, where cars are king and drivers are used to low prices. Gasoline prices at the pumps were 36% higher than the same time last year, but drivers surveyed by AFP in Los Angeles, according to data collected by the AAA Automobile Association in California, appeared to be participating for now.
“It’s expensive, but it’s always been more expensive here in California (than in other US states, editor’s note), so I guess we’re used to it,” said Harry Lee, who stopped on the way to work to to fuel.
According to the AAA, the American motorist pays about a dollar per liter of gasoline, but California has much stricter tax and environmental standards, for example a specific formula for fuels during the hot months to reduce pollution. Californian prices are therefore always mechanically higher than elsewhere. If the increase was fueled by the economic recovery and still limited supplies from the major oil-producing countries, in Southern California it was also caused by seasonal factors, such as the shutdown of maintenance at certain refineries, the AAA local notes.