Why fuel prices will remain high this summer

While gasoline has returned to levels close to 2 euros per litre, ultimately fear of an embargo in the context of the war in Ukraine is helping to keep fuel prices high.

Until when will motorists face high gas station prices? According to the latest figures from the Ministry of Ecological Transition, gasoline prices rose by almost 9 cents last week to an average of 1.9386 euros per liter (SP95-E10, the most consumed gasoline in France).

The war in Ukraine and the “driving season”

Double explanation: on the side of the war in Ukraine, which continues to keep crude oil prices high, but also with a seasonal effect on the US side.

“The increase in gasoline prices is primarily due to the high price of crude oil, a barrel of which has cost almost $5 in recent days, as well as increased demand for gasoline starting there ‘driving season’ in the United States: Americans have been driving more since May and this is reflected on this side of the Atlantic,” explains Olivier Gantois, President of the French Petroleum Industry Union (Ufip).

A small lull, on the other hand, concerns diesel fuel, the most consumed fuel in France, which lost 2.6 cents last week to 1.852 euros per liter.

“Diesel overheating appears to be on the decline at present, as it is known to have occurred mainly due to embargo fears and supply disruptions,” emphasizes Olivier Gantois.

If you remove the government rebate (15 cents without tax, 18 cents with tax), then the difference between gasoline and diesel is even in the “normal” ratio, which is usually explained by the difference in taxation of the two fuels. Thus, at least a temporary cessation of the atypical situation when diesel is more expensive than gasoline, which took place from the beginning of the war in Ukraine until mid-May.

High oil price while the war in Ukraine lasts

Fear of an embargo on oil, as well as on Russian diesel fuel, has thus driven oil prices to unprecedented levels, although Europe is still seeking a consensus on this issue.

“For almost two months now, the United States, Canada, Japan have decided on this embargo on Russian oil, but in Europe the decision must be taken unanimously and it has not yet entered into force,” reminds Olivier Ghent.

And this international situation should continue in the coming months. “It is very difficult to predict the evolution of oil prices, but we at Ufip believe that they will remain at a high level as long as the war in Ukraine continues and the international situation remains unstable,” adds Olivier Ghent.

While waiting for a consensus on a possible embargo, each government is trying to secure its fuel supplies in order to limit price increases.

“We have a task force at the Ministry of Energy Transition that will look morning, afternoon and evening for alternative fuel and diesel suppliers precisely to cushion the shock of the sanctions. [contre la Russie, NDLR] possibly on fuel,” Energy Transition Minister Agnès Panier-Runashe recalled on BFMTV on Tuesday.

Help on the pump

For consumers, the government rebate keeps fuel prices below or close to the €2 per liter threshold for now, but for how long? The measure should indeed end on July 31st, and the government is considering a “more targeted” measure with a device designed primarily for large rollers. “This is still being studied, so I am not going to give you any devices today, but we are working on it,” the minister confirmed this morning.

To also see if major distributors or oil companies will continue to practice certain discounts. After the end of the discount of 10 centimes per liter, TotalEnergies has already announced that it will introduce a new discount at its petrol stations this summer.