In the beginning
Oil prices have risen again, against a backdrop of new restrictive measures by Saudi Arabia and Russia.
The former is set to continue reducing its oil production by one million barrels a day from October to December. The latter will continue to reduce its exports by 300,000 barrels per day until the end of December 2023.
Since these announcements, prices have drifted upwards...
Impact at the pump
As a reminder, three categories of players are present in the French fuel distribution market: oil companies, such as Total, independent distribution chains such as Picoty (Avia) and, finally, major retailers such as E. Leclerc and Carrefour.
Until very recently, the government persisted in its plan to authorize the sale of fuel at a loss ; it had, moreover, come up against the refusal of the major retailers, who pointed out that the practice had been banned since 1963.
A war of figures, particularly when it comes to margins: while supermarkets claim that fuel is above all a loss leader on which no margins are generated, apart from a few euro cents, associations such as the Association Nationale de Consommateurs et d'Usagers, for example, point toa gross margin of more than 25 cents per liter of SP 95...
Following a meeting with the main fuel distributors at Matignon, the French government announced a new plan on September 26. Nearly 120,000 sales of fuel at cost in some 4,000 stations should take place by the end of the year.
The Carrefour and Leclerc chains have already taken a positive stance, committing themselves to carrying out such operations every day. Casino, Cora and Intermarché, for their part, are expected to offer discounts two weekends a month, and Système U and Auchan at least one weekend a month. The exact level of discounts at the pump has not been specified, and should be left to the discretion of each retailer.
On the other hand, the situation of the 5,800 independent petrol stations in France is more worrying; most of them are losing 20% of their clientele, as they are forced to charge 10% more than supermarkets, due to their limited financial resources. The number of such outlets has fallen from 40,000 in the 1980s to 5,800 in 2022. Over the same period, the number of service stations in supermarkets and hypermarkets jumped from 2,000 to 5,000!
Severe impact on certain professions
Many companies are impacted by the rise in fuel prices... First and foremost, transport providers, who are directly affected by the increase and have to include it in their costs. But also companies that ship goods, whether they have their own means of transport or depend on a logistics provider.
For most of these players, fuel has thus become the biggest expense after driver salaries, accounting for around 15-25% of total operating costs.
The road haulage sector also suffers from other problems, such as the regular siphoning of fuel tanks by truck drivers at rest areas.
Fishing professionals have also been hard hit by this price explosion. This summer's further rise in the price of diesel, coupled with the capping of subsidies (intended to alleviate the additional costs caused by the Russian-Ukrainian conflict), and the stagnation of the fish market since the start of the year, are threatening 60% of French fishing supplies in the very short term.
As far as civil aviation is concerned, the impact on consumers is immediate. Fuel accounts for 20 to 40% of the ticket price, depending on flight duration and aircraft model. Air France already includes a "sustainable aviation fuel contribution" of 1 to 12 euros per seat in its fare structure.
For their part, shipping companies are trying to adjust their surcharges as much as possible. With the price per barrel rising sharply, the various fuels used by professionals - VLSFO (low-sulfur fuel oil), MGO (Marine Gas Oil) and IFO (Intermediate Fuel Oil) - are currently positioned at very high levels.
The next few months...
This upward price trend is set to continue, given that the surge is primarily the result of the strategy adopted by OPEC (Organization of the Petroleum Exporting Countries) member countries, who decided in June to reduce oil extraction in order to maintain high barrel prices.
This situation is all the more worrying in France, where taxes account for almost 60% of the total price of a liter of fuel (a proportion well above the world average).
It remains to be seen what Russia and Saudi Arabia will decide in 2024... Moscow's current position is above all to reduce the supply of oil on the markets in order to boost prices, a way for Russia to try and increase its revenue from the sale of hydrocarbons, at a time when the rouble has weakened considerably against the dollar and the euro.
As for OPEC, its members have recommended continuing to reduce production until...the end of 2024. These geopolitical tensions seem far from over, as do soaring fuel prices.
