SCAN ECO – While oil prices have lost 20% in a month, pump prices have only moderately decreased, prompting the government to ask oil companies and distributors for a move. Here are the reasons for this discrepancy.
History repeats itself. As in 2011, in 2014 or 2015, the debate over the delay in time between the fall in oil prices and the pump price has resurfaced. This time in a more stormy context, marked by threats of blocking the streets on November 17 and by attempts by the government to calm the rumbling. From the beginning of October, the price of a barrel of oil decreased by 20%. The barrel of Brent, European reference, has even dropped below the $ 70 mark on Friday, at $ 69.99. A first since April. At the same time, WTI, the US benchmark, had fallen to $ 60.06, the lowest since March. At the same time, according to carbu.com, diesel fuel has seen its price fall by an average of 3% on the pump (-4.5 cents / liter) in the span of a month while that of unleaded petrol dropped by 5%. % (- 8 cents). Far from the 20% recorded in the world oil markets. Explanations.
• Why are the lower prices at the pump slower?
The decline is not the same entity because fuel prices depend on many variables regardless of the fluctuations of crude oil in world markets. Starting from the taxes imposed by the state, which weighs heavily on the final price at the pump, ie the VAT of 19.6% and the tax on the national consumption of energy products (TICPE), whose level will increase constantly until 2021, officially for ecological reasons. These taxes represent around 60% of the fuel price.
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The price of refined products, which is quoted on the Rotterdam market for Northern Europe, is between 32% and 27% of the price of diesel and petrol. It depends, of course, on the price of a barrel of crude oil, but it is also linked to the cost of refining and the seasonal demand of this product. According to data from the Ministry of Ecology, the gross margin for refining oil tankers is currently around 27 euros per tonne (compared to 45 euros per tonne in 2015, for example). As a reminder, the breakeven point of the refiners is around 25 euros per tonne of crude processed. The other positions weigh even less in the composition of the pump price, in particular the gross margin of distribution (8%). This margin, collected by distributors, covers in particular the costs of logistics and distribution.
Another factor that explains the price delay at the pump: the decline in the euro against the dollar. Black gold is actually referred to as a greenback. But a weaker euro increases oil purchases. The actual decline in the price of fuel sold in euros is therefore lower than the decline in the price of oil in dollars.
• Do industrialists and distributors benefit from the situation?
Tankers such as Total or Shell could eventually try to dispose of the oil stock purchased several months earlier at a higher price. Distributors can also benefit for some time from falling oil prices to restore their margins. This is the scenario that occurred in the spring of 2011. "When pump prices exceed 1.50 euro per liter, operators tend to mitigate the impact on the customer by taking them in. So when oil prices have started to decline, there was a small effect of restoring the margin, "said Jean-Louis Schilansky, at the time president of the Union of Petroleum Industries (UFIP). In 2011, the maneuver was identified by the DGCCRF and irritated Christine Lagarde, Minister of Economics, who had threatened the sector of industrial sanctions.
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Retailers are now refraining from inflating their margins to the detriment of motorists. They ensure that they follow the barrel price evolution as best as possible. "The final net margin of service stations is one hundredth per liter, so it is difficult to do more", says Francis Duseux, the current president of Ufip. But the ministers of Economics, Bruno Mayor and Ecology, François de Rugy, yesterday asked them to amplify the movement by transmitting daily oil prices on pump prices. If not, they are ready to repress. "There is more control by the government departments that feeds distributors are going through these price declines, there may still be penalties for non-compliance with competition," said François de Rugy this morning on Franceinfo. "When prices rise, pump increases, it must be both ways, the Total network told us that it had already dropped by 3 cents for gasoline and diesel," said the minister, inviting the French to appreciate the gesture . "When prices go up by 3 cents, people say" it's unbearable "and when it goes down, it says" 3 cents, it's nothing "," he complained.
• Can we expect the decline to continue?
At this time, the markets react to Donald Trump's announcement of less severe sanctions than expected for Iran. By granting exemptions to certain countries (including China and India), the US president makes clear that he no longer wants to reduce Iranian exports of black gold to zero. "Adding the fact that Saudi Arabia and Russia have increased production since June, we understand that bears are the pinnacle," said Stephen Innes, an analyst at Oanda. On the demand side, investors expect a slowdown due to the expected slowdown in global growth. However, in the long run, the trend should remain bullish. "Everything indicates that oil prices will remain high in the months and years to come," confirmed Bruno Le Maire.