PublishedAugust 9, 2022, 6:24 PM
LuxembourgWill fuel prices continue to fall?
LUXEMBOURG – Gasoline and diesel prices have been falling in Luxembourg since the beginning of August. Will this momentum continue? How is it explained?
- par
- Thomas Holzer et Pascal Piatkowski
Fuel prices are much lower than in June.
Vincent Lescaut
Records at the pump and fuel expenses that have continued to climb over the weeks. Since the beginning of the spring, the inflation of gasoline and diesel prices has constituted a significant loss of purchasing power for consumers. However, the dynamic seems to have reversed in August with a succession of drops in fuel prices.
At 1.687 euro per liter, diesel had not been so “cheap” since April 9. As for unleaded 95, you have to go back to March 2 to find a price equivalent to 1.598 euros per liter, currently in force. At the time, the war in Ukraine had just started and observers were promising serious upheavals in energy costs.
Does this development mean a permanent inversion of the curve? “Impossible to make predictions”, replies Jean-Marc Zahlen, secretary general of the Groupement Pétrolier Luxembourgeois (GPL), meaning that the course of the conflict in Ukraine will be decisive. As always, fuel prices in Luxembourg are directly linked to the geopolitical context.
New flows and increased production
These same international factors explain the declines recorded over the past few days: “It is above all the result of the fall in the prices of ex-refinery products,” replies Mr. Zahlen. Explanations for this, the actors have found “new flows” since the embargo on Russian oil. “The carriers have reorganized themselves in terms of distribution, even if the establishment of these flows took time”, he specifies.
An evolution of the financial logic also with “less anticipation on the market” but also changes in production. The resolution of the OPEC countries to slightly increase the quantities produced has borne fruit. Recent meetings between Western leaders and leaders of the Gulf countries may have influenced this decision, even if some regret a very limited increase in the quantities of crude oil promised for the world market.
“It is very difficult to isolate the impact of all these factors,” says Jean-Marc Zahlen. It should also be remembered that the rebate of 7.5 centimes per liter of fuel decided by the government has been extended for the month of August. But it will not be renewed at the start of the school year.