SCAN ECO – Even though oil prices fell by 20% in one month, pump prices only slightly decreased, forcing the government to demand oil companies and dealers to move. Here are the reasons for this discrepancy.
The story repeats itself. As in 2011, in 2014 or 2015, the debate on the decline in oil prices and the price of the pump was halted. This time in the harsh context of the threat of roadblock on November 17, and the government's attempts to calm grumbling. Since the beginning of October, the price per barrel of oil has decreased by 20%. The Brent barrel, the European reference value, even fell below $ 70 mark this Friday to $ 69.99. First since April. At the same time, WTI, the US standard, was down to $ 60.06, the lowest since March. At the same time, according to carbu.com, diesel fuel decreased by an average of 3% (-4.5 santims / liter) per month, while unleaded 95 decreased by 5% (-8 santimes). Far from the 20% recorded on world oil markets. Explanations.
• Why lower prices in the pump are slower?
The decrease is not the same as fuel prices depend on many variables, irrespective of fluctuations in crude oil on world markets. Starting with taxes levied by the state, which weigh a very large final price of the pump, namely 19.6% VAT and the domestic consumption tax on energy products (TICPE), the level of which will increase for officially ecological reasons until 2021. These taxes represent about 60% of the fuel price.
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The price of the refined product quoted in the Rotterdam market in northern Europe is between 32% and 27% of the price of diesel and gasoline. This, of course, depends on the price of oil barrels, but it also relates to refining costs and seasonal demand for this product. According to the Ministry of Ecology, the gross margin of oil tanker refinancing currently stands at around € 27 per tonne (from € 45 per tonne, for example, in 2015). As a reminder, the disruption point for refineries is around € 25 per tonne of processed raw materials. Other positions weigh the pump price, in particular the gross margin (8%). This difference, which is collected by dealers, applies in particular to the costs of logistics and distribution.
Another factor that explains the decline in pump prices: the euro depreciates against the dollar. Black gold is really expressed in the winter. But weaker euros increase oil purchases. The actual fall in fuel prices in the euro is lower than the drop in oil prices in dollars.
• Do entrepreneurs and distributors benefit from the situation?
Tankers such as Total and Shell may try to sell oil stocks that were bought several months earlier at a higher price. Distributors may for some time benefit from the drop in oil prices in order to rebuild their reserves. This is a scenario that took place in the spring of 2011. "If the price of pumps exceeds EUR 1.50 per liter, operators tend to reduce their impact on the customer when they are eating. So when crude oil prices started to fall, it has had a small effect in terms of returning profits," said Jean-Louis Sylansky, President of the French Petroleum Industry Union (Ufip). In 2011, the DGCCRF chose a maneuver and angered the Minister of Economic Affairs, Christine Lagarde, who threatened the sector with sanctions.
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Today, retailers refrain from increasing their reserves at the expense of drivers. They make sure to keep track of the price of barrels as much as possible. "The net profit of the end-to-end petrol stations is about a cent per liter, so it's hard to do more," says Francis Duseux, current Ufip president. However, Economic Minister Bruno Meer and ecologist François de Rugy asked yesterday to intensify this movement, reducing daily oil prices at pump prices. Otherwise, they are ready to attack. "Government departments have made more careful checks that fuel distributors are lowering these prices. Violations of competition rules may still be penalized," François de Rugy warned this morning in France. "When prices rise, it will increase at the pump, it should be in two directions. The Total network told us that it has already dropped by 3 cents for gasoline and diesel," said the minister, urging the French to assess the gesture. "When prices rise by 3 cents, people say it's unbearable, and when it cuts down, it says:" 3 cents, it's nothing, "he said.
• Can we expect to continue?
Markets are now responding to Donald Trump's statement on less stringent sanctions than those imposed on Iran. By allocating exemptions to certain countries (including China and India), the US President makes clear that he no longer intends to immediately cut Iran's black gold exports to zero. "When we add to the fact that Saudi Arabia and Russia have increased production since June, we understand that bears are the culmination," said Oanda analyst Stephen Innes. In terms of demand, investors expect a slowdown, as global growth is expected to slow down. However, in the long run, the trend should remain at a rapid pace. "All indications are that oil prices will remain high in the coming months and in the coming years," said Bruno Le Maire.