Fuel costs have risen in recent weeks, mostly owing to the Ukraine conflict, which has pushed up oil prices. Other reasons also explain the record high pump costs.
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| [Gasoline Price Increase] |
2 euros and 14 cents. Last week, a litre of fuel cost you this much. Notably, this comes after a spike in oil prices, which reached close to 140 dollars in early March before receding.
But the rise in oil prices after Russia invaded Ukraine doesn't explain everything. Fuel was costly even before the war. In early February, a litre of fuel cost roughly €1.70. And the price per barrel was approximately $90. This price was already excessive, but we knew it. Like 10 years ago. Except in 2012, diesel was €1.30. It was 30% cheaper! Why the disparity with the same barrel price? The first factor is the euro-dollar parity, or the value of the euro against the dollar. How much is a euro worth in dollars, if oil is always traded in dollars?
A euro was worth approximately $30 ten years ago, but now it is worth just $10. This indicates that for the same number of euros in 2012, we could purchase more oil. We received more for our money, making oil cheaper.
As a rule, they make up more than half of a typical gas pump charge, and they've always been crucial. Is it not so? They've risen in the past decade.
We must return to France's unique gasoline taxes in order to fully grasp their magnitude. There are three types of taxes: the TICPE, a levy on petroleum goods that includes the well-known carbon tax. Before the rise of the yellow vests in 2018, this TICPE had been in full swing.
Then there's VAT, which is charged at a rate of 20%, just as it is on everything else we buy. Taxes like these have a multiplier effect: the more expensive oil becomes, so does a driver's total cost of ownership.
On top of that, the TICPE is subject to VAT. It's like paying a tax on a tax when you fill up. The same process applies: the higher the TICPE, the higher the VAT on TICPE. This was the situation up until 2018.
This is known as gross margins, and they have also increased. We keep a lot of information here, including the costs of shipping by boat or pipeline, the location of storage facilities, the route taken to reach train stations, and the revenue made by different market participants. Distributors allege that they only make a few cents each litre sold since the prices are so cheap.
When it comes to energy providers, such as oil corporations, we must also consider their environmental responsibilities. Renewable energy or energy conservation is required of them as a condition of their employment. A 10 cent rise to a 17 cent increase in gross margins on a litre of diesel has been made in the last decade.
As a result, even if the price of oil has risen, gasoline remains costly. And that's not going to change.