An unprecedented measure. To lower prices at the pump, the executive is preparing to authorize distributors to sell their fuels at a loss, "from the beginning of December", for a period of "six months". While the government's decision has left some commentators skeptical, it speaks volumes about the concern at the top of the state about soaring fuel costs. French motorists now have to pay 1.96 cents on average for a liter of SP95 gasoline and 1.88 cents for a liter of diesel, according to weekly data from the European Commission. We have to go back to 17 April - in the case of oil - and 6 February - in the case of diesel - to return to such high levels.
However, the French are not the only ones to see their wallets lighten at the exit of gas stations. In all countries of the Eurozone, the liter of unleaded has jumped by twenty cents on average since the beginning of the year, from 1.71 euros to 1.9 euros. Over the same period, the price of diesel rose from €1.77 to €1.80. The observation, extended to the whole of the European Union, is even more obvious: the price of SP95 has never risen so high in one year. It now stands at 1.81 euros on average, compared to 1.66 euros nine months earlier.
Prices make the big difference at European level
If the whole continent is affected by this soaring prices, prices at the pump are particularly high for French motorists... and often more expensive than in our European neighbours. SP95 petrol is cheaper in Spain (1.73 per litre on average), Belgium (1.86), Luxembourg (1.64) and Germany (1.94). At EU level, only a few countries are more expensive than France: Denmark (2.05), Finland (1.98), Greece (2), Italy (1.96) and the Netherlands (2.10). Conversely, a handful of countries have unbeatable tariffs, such as Bulgaria (1.42), Poland (1.39) or Romania (1.47). Regarding diesel, the France is even worse, since only the Scandinavian countries (Sweden, Denmark, Finland), the Netherlands and Belgium have higher prices.
To understand these disparities, we must consider the many factors that determine the pump price paid by Europeans. "The price at the pump, regardless of the country, is defined by five parameters: the price per barrel, the euro-dollar exchange, the refining margin, the distribution margin, and finally, taxes," explains Philippe Charlez, an expert in energy issues for the Sapiens Institute. It is the soaring cost of a barrel of Brent on international markets that explains, in the first place, the surge in prices at European service stations. "Since June, the price of Brent has risen significantly, supported by the very strong demand from Southeast Asian countries on the one hand, and, on the other hand, by the voluntary reduction in supply decided by OPEC and Russia." Earlier this month, Saudi Arabia and Russia announced oil production cuts until the end of 2023, news that propelled crude prices to their highest levels in a decade.
The "refining margin", which corresponds to the difference between the valuation of refined products and the price of Brent, has also worked against the Europeans. Listed in Rotterdam, "refining margins have increased by 35% in recent months, for reasons, again, of supply and demand," notes the expert.
Between 36% and 56% fuel taxes in Europe
These two parameters are common to all the countries of the Union. The others, on the other hand, differ from country to country. This is particularly the case for distribution margins. "They include the transport of fuel to the point of distribution and the costs of the fuel pump, which differ according to the location," explains Philippe Charlez. But, according to the expert, distributors are not the main responsible for the soaring French prices. "In France, as elsewhere, distribution margins have rather fallen over the last two months, obeying a law that when refining margins increase, the distributor's margin decreases," reports Philippe Charlez.
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That leaves the taxes. It is through this lever that States can directly influence the price of fuel at the pump. "Between 36% and 56% of the price charged on fuel in Europe comes from the public authorities: this is the taxation weighing on fuels," says Philippe Charlez. This is deliberately heavy, in order to encourage motorists to change their behavior and to obtain more modern, less greedy and less polluting vehicles. However, fuel taxation is far from uniform across Europe. While the France has three fuel taxes - the TICPE, VAT and VAT on the TICPE - accounting for 52% of the price of gasoline at the pump (49% for diesel), some countries are more complacent towards motorists. This is the case in most Eastern European countries (Hungary, Bulgaria, Romania...), whose share of taxes in the invoiced product hardly exceeds 45%. Only a few European countries tax oil more than the French state: this is the case of Italy (55% of the product sold), Greece (55%), the Netherlands (55%) and Finland (56%). The France is distinguished above all by its high level of taxation on diesel, five points higher than the European average.
Overall, the countries that tax the least are those whose motorists benefit from the best pump rates. There are only a few exceptions worth noting. At the same level of taxation, Belgium enjoys a diesel price on average less advantageous than France (1.9 euros per litre). The paradox is even more striking in Sweden, which taxes diesel at only 36%, but pays much more than in France, at 2.15 euros per liter on average. "This can only come from distribution margins, and can therefore be interpreted as a good point for our national network of distributors, which is undoubtedly more competitive than elsewhere," says Philippe Charlez. A national advantage that could grow even more as soon as French distributors are allowed to "sell at a loss", as the government wishes.