Price at the pump: why has the price of gasoline risen sharply since the beginning of 2024?

During the first four months of the year, gasoline prices rose by an average of 10 cents per liter.

Are we headed for another sustainable increase in gasoline prices? Since the beginning of 2024, the prices of this fuel have risen by an average of 10 cents per liter, according to calculations by Fig details (Le Figaro), created based on public data from the Ministry of Energy Transition.

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For example, a liter of unleaded 98 now costs an average of 1.9622 euros, the highest level since the beginning of 2024. The prices at the pump for unleaded 95 (1.9050 euros) and those of E10 (1.8827 euros) are moving in the same direction. The price of diesel is more limited and averages 1.8016 euros per liter.

Why is the price of diesel less affected by the increase than that of gasoline? Patrice Geoffron, professor of economics at Paris Dauphine University and director of the Center for Geopolitics of Energy and Raw Materials (CGEMP) explains that “the prices of petrol and diesel do not necessarily evolve in parallel, with differences that can suddenly widen or narrow (the gap became 7 cents with SP 98 in October, currently it is 15 cents.) The war in Ukraine has also disrupted the usual circuits of crude oil processing and refining..”

“Even though prices have increased since the beginning of the year, they are not exceptionally high”

With regard to the increase in the price of gasoline, the economist wants to make some nuance: “It must be emphasized that even if prices have increased since the beginning of the year, they are not exceptionally high: they have exceeded 2€/l (SP98) . ) twice in the last twelve months (in April and October), which is not the case today (€1.96), with a decrease of around 2% in one year for all fuels.

But how can we justify this price change at the pump? The increase is mainly explained by the tensions in the Middle East. The conflict between Hamas and Israel, as well as the attacks in the Red Sea, have caused oil prices to rise again. “This leads to longer routes through Africa for some petroleum products,” says Patrice Geoffron.

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The situation in the Middle East has led to market concerns and a rise in prices, in a context already weakened by production cuts in Saudi Arabia and Russia. The price of Brent is then affected with the price set at around US$87, up more than US$7 since last January according to INSEE data. And if the price of Brent rises, the price of petrol will follow.

Will the situation stabilize?

Will the rise continue or can we expect a lull? “We should not hope for stabilization,” announces Patrice Geoffron. According to him, “the only solution would be a tax that varies inversely with the price of the barrel, in order to absorb shocks.” Above all, “these fluctuations remind us of the absolute need to reduce this dependence on oil,” the economist concludes..

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