Russia’s war in Ukraine will further accelerate fuel price increases due to its impact on the oil market. And this, while prices at the pump are already reaching records.
Russia ranks second in the ranking of the largest oil producers, behind the United States and ahead of Saudi Arabia. It is also the second most exporting country. Unsurprisingly, therefore, the military offensive that Russia has just launched on Ukraine is felt on the oil markets. The price of a barrel of Brent crude oil from the North Sea, the cost of which serves as a benchmark, has just climbed to cross the $100 mark, or around €90. This increase will soon be felt in the price of fuel at the pump.
Prices already very high before the conflict
Tensions on energy due to the pandemic had already caused the price of a barrel of Brent to rise from around $55 to $87 between January 2021 and January 2022, resulting in high inflation in prices at the pump. During the month of February, Moscow’s maneuvers around Ukraine have amplified the phenomenon, bringing the price per barrel to nearly $100. In France, crude oil represents just over 30% of the price of gasoline. If we add the refining gross margin and logistics, this amounts to approximately 43% of the price at the pump, the rest being made up of taxes. Faced with recent increases in the price of crude oil, the French government has set up the distribution of an exceptional “inflation allowance” of €100, then increased by 10% the scale of tax-deductible mileage allowances. But, due to a lack of lower taxes, prices are already reaching record levels: 1.71 €/l on average for diesel, 1.76 €/l for SP95-E10 and 1.85 €/l for SP98.
Further pressure on oil
The conflict in Ukraine is causing tension between Russia and the major Western powers, which have just announced a series of economic sanctions against it.
Moscow could retaliate in business, and on the ground clashes could affect the flow of oil. The war should therefore further accelerate the rise in the price of a barrel, and with it that of the cost of fuel as far as France. ” It is very likely that prices at the pump will continue to rise warned Olivier Gantois, president of the UFIP (French Union of Petroleum Industries), at the microphone of RTL. He expects the liter of diesel to rise by around three cents in the next few days. According to several analysts, the price of Brent could exceed $120 in the coming weeks.
Diesel could reach €1.80/l, SP 98 €2/l. Some even mention a barrel at $150, higher than the record high of $146 dating from the 2008 financial crisis.
No shortage on the agenda
If a rise in fuel prices is to be expected, the risk of an oil shortage in France due to the war in Ukraine seems on the other hand low because our country, 99% of whose oil is imported, is supplied by various States. Including Russia, former members of the USSR account for about 30% of our crude oil imports. The Minister of Ecological Transition, Barbara Pompili, therefore wanted to be reassuring. ” Even if Russia were to stop its exports, which is not currently on the agenda, we do not run any risk of energy supply, whether fuel or gas. “, she said.
““We do not run any energy supply risk. »“
And the minister underlined that France has emergency reserves. ” We have large strategic oil stocks, which cover almost 90 days, so almost three months of our consumption. They allow us to deal with supply disruptions. […]The French are not at risk of running out of fuel or gas for heating in the coming months “, she insisted.
Sources: Government, RTL, BFM Business, UFIP, BP
