Since the start of the Covid-19 pandemic, the price of a barrel of American oil has suffered a dizzying fall, it even plunged into negative territory on April 20, for the first time in its history. In question,
travel restrictions and reduced economic activity
who melted the demand. It fell about 30% in April, according to estimates from the International Energy Agency.
According to Francis Perrin, director of research at the Institute of International and Strategic Relations (Iris), ”
when 4 billion people are arrested by confining them to their homes, road, air and maritime transport stops, which has a phenomenal impact on oil consumption. “
In addition, supply, already oversupplied before the crisis, increased due to a price war waged by Russia and Saudi Arabia last March before ending it. So it’s initially,
low demand coupled with increased supply
that brought down the price of black gold.
” To rebalance the world market, the oil exporting countries have decided to massively reduce their production on May 1. But that will have no immediate effect, we will have to wait until the second half of 2020 “
, explains Francis Perrin. According to him, the oil sector has therefore suffered ”
the sequence of a health crisis, an economic crisis and an oil crisis “
. And it should take time to get over it.
The weight of taxes on the pump price
Some of you on our Facebook page have wondered
what impact this collapse in oil prices could have on our budget
. If the value of crude crumbles, shouldn’t that of fuel drop drastically as well?
The price of gasoline and diesel fuel did drop in April, but only about 20% from last January,
not following the oil price curve which collapsed. It should not drop further for one simple reason:
the price at the pump depends mainly on taxes, which amount to 65%
. Unlike petroleum, VAT and TICPE will not drop due to a global pandemic, their rate being fixed each year. In addition to taxation, the price of gasoline is made up of approximately 15% of distribution costs. In a liter of diesel, ” the raw material ultimately represents less than 20% of the price
“, as Francis Perrin states. Even when the crude crumbles,
gas prices cannot go below a certain level.
The price of gas not correlated to that of oil
According to
Le Figaro, the gas prices applied by Engie could decrease by 1.3% on May 1. A very small drop suggesting that the
the price of gas is no longer really indexed to that of oil.
Francis Perrin confirms this: ”
Today, when we determine the price of gas in France, the price of oil no longer intervenes, the two are uncorrelated
. “
Since the 1960s,
the prices of these two hydrocarbons followed each other because the producers of oil and gas were often the same
,
” this link allowed them not to lose money on gas when they exported oil “
.
In the last decade, faced with an increase in the price of oil, French governments have gradually broken this link. They ended up
modify the gas tariff formula so that it is no longer dependent on the price of crude
. What now influences the price offered by Engie is essentially ”
the costs of supply, transport, storage and distribution … and the margin that the company generates
. “
But then
how to explain that Engie plans to lower its prices (slightly) next month
? ”
A small part of the supply costs remains linked to the price of crude oil because the exporters have not completely abandoned the oil / gas link
“, says Francis Perrin.
Some foreign producers from whom Engie buys can therefore sell their gas a little cheaper, due to the drop in the barrel.
But for now, this drop is too small to really lighten your budget!
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