Fuel crisis: a very slight drop in prices which is not set to last

The announcement made a lot of noise in the midst of the fuel price crisis: guest of RTL last Monday, October 18, Michel-Edouard Leclerc announced that his stores would distribute his fuel at cost price. Several large-scale retailers then followed suit, announcing in turn devices intended to reduce motorists’ bills.

The effects of this rebate seem to be felt slightly, putting an end to a long series of daily increases, which will not fail to relieve motorists, their eyes riveted on prices at the pump.

A decline “very real, but however limited in time and in its impact”, according to Olivier Gantois, president of the French Union of Petroleum Industries (UFIP).

Decrease over a week for the first time since this summer

“The price has fallen by one cent on unleaded (1.65 euros per liter on average) and diesel (1.55 euros) from October 15 to October 22, 2021” confirms Olivier Gantois from his post of price observation at Ufip. This decrease, although very significant, is nevertheless “significant” according to the French expert in black gold.

According to our estimates, out of the 2,924 stations having raised their prices in the last 48 hours (i.e. nearly a third of the French fleet), 78% have seen their prices drop. A proportion which can reach 95% as in Loire-Atlantique (44).

A drop unevenly distributed over the territory, given that between October 19 and 25, 71% of the Parisian stations that we scrutinized were still on the rise last week. An exceptional situation for Ile-de-France since the number of resorts recording a decrease is largely in the majority. Starting with the Yvelines where 89% of the resorts are showing lower prices.

Supermarkets are pulling prices down

Neither the inflation check, announced for the end of the year by the government, nor the international oil prices, still on the rise, seem to weigh on this drop in prices. According to Olivier Gantois, we have to turn to supermarkets to explain part of the phenomenon.

“We cannot clearly demonstrate what their weight is in this fluctuation, even if the drop in prices observed is very likely linked to operations launched a week ago. In particular by E. Leclerc and Intermarché which are the two largest French distributors ”analyzes the president of Ufip. An effect that is likely to snowball the competition: “when such a movement takes place, other distributors are often forced to follow in order not to lose market share” he continues.

An impact limited to a few cents and a few days

Most of the operations announced by supermarkets are supposed to end at the end of October. “We must expect that everyone will revert to their pricing policy. Especially since the distributors’ margins are minimal: around a cent per liter. The drop announced by distributors is necessarily limited in volume and time ”bid Ufip.

The price of fuel will then be “suspended from international oil prices and the euro-dollar exchange rate,” recalls Olivier Gantois (UFIP). On this front, a ray of hope lit up at the beginning of October: “the OPEC + countries have decided to speed up their production, to 400,000 additional barrels per day”. As a benchmark, world production is currently back to levels close to before the health crisis, around 100 million barrels per day. However, the increase was insufficient to lower prices at the pump.

New negotiations will take place on November 4. If the main oil-producing countries still agree to increase production, “the good news for the consumer could be felt quickly at the pump” according to Olivier Gantois, engineer by training.

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