Fuel prices: with deconfinement, will refueling cost much more?

Less than € 1 per liter of diesel. It has been ages since a gas station posted this rate. The liter of diesel has nevertheless fallen below the symbolic bar of the euro in some service stations in France. An attractive price which few French people were able to take advantage of during confinement.

At the height of the coronavirus crisis, approximately 4 billion people were confined worldwide. A blackboard for producers of black gold. Between early January and late March, crude oil prices dropped 70% on international markets. Brent crude oil, quoted in London, fell from $ 68 a barrel on January 6 to less than $ 20 in March and April. On April 20, a barrel of American oil even fell below zero euro to – $ 37.63. Never seen. “What brought prices down is the massive imbalance between supply and demand with massive overproduction”, details Francis Perrin, research director at Iris and specialist in energy issues.

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Declining oil production

Today, many countries are unconfined and transport represents the main consumption of oil in the world. Demand is increasing again, as are prices. Francis Perrin sees three explanations: “First explanation of many countries have started to lift their containment. Then, twenty oil producing countries like Saudi Arabia or Russia have taken measures to reduce their production by a very significant 9, 7 million barrels per day since May 1. Finally in the United States, the world’s largest producer of oil, several private companies have also reduced their production. “

On one euro of fuel, we pay around 70% of taxes, 14 to 16% correspond to the share of the price of oil and the rest is made up of the costs and margins of the petroleum industry. During the confinement, the taxes did not budge: it is therefore the fall in crude oil prices which is at the origin of the fall in prices at the pump.

Slight increase after deconfinement

Since May 11, with deconfinement, prices have gone up slightly. Average selling prices were € 1.1578 per liter of diesel, € 1.2442 per liter of unleaded 95, € 1.2227 per liter of E10 and € 1.3001 per liter of unleaded 98, according to the statements of the Ministry for the Ecological and Inclusive Transition on May 15.

The rise should continue according to Francis Perrin who compares oil prices to a plunger. “The one who dives at the bottom of the sea does not go up suddenly, he must respect landings. It is the same with oil prices.” The barrel of Brent, fell below $ 20, was at $ 34/35 this Friday in the early afternoon. “Oil prices will continue to rise steadily over the next few weeks. I imagine there will be a fairly strong economic recovery in the second quarter, which will necessarily lead to an increase in demand for oil and therefore in prices.”

Will our fuel tank remain at a reasonable level? For Francis Perrin, “this is the most probable hypothesis. But it is enough that there is a major geopolitical crisis in the Middle East or a renewed tension between the United States and Iran … Nobody can predict oil prices. “