Petrol prices in France are still significantly higher than other EU countries. We explain why.
The effects from the war in Ukraine saw the cost of gasoline prices in the European Union (EU) skyrocket back in February 2022, with fear of shortages and being cut off from Russian supplies fuelling the hikes.
Fast forward to May 2023 and the situation has settled down significantly. The price of a barrel of gas has returned to mid-February 2022 levels, and this return to normalcy has by and large been passed on to consumers at the pumps… except in France.
The average price of a litre of unleaded SP95-E10 in France is €1.84. In Italy and Germany, motorists are paying 10 centimes less per litre and in Eastern Europe, it’s a full 15 centimes less. Only Demark has higher prices than France.
REASONS FOR HIGH FUEL PRICES IN FRANCE
The continued inflated prices are being blamed on the high cost of ethanol, an ingredient that is added to conventional fuel in France. Ethanol is of plant origin, normally corn, and has been found to have lower emissions and is therefore better for the environment.
In France, most motorists use E10, which is a 10% ethanol, 90% gasoline blend. This higher costing gas coupled with high fuel taxes and 20% VAT has meant that French consumers pay more at the pumps than in other countries.
There is also the issue of strikes. Blockades at the refineries have meant that petrol was imported to avoid shortages, a costly endeavour for the distributors that gets passed on to consumers.
BUT THERE’S MORE TO IT THAN THAT
Whilst some of the reasons fuel prices remain so high can be explained away by regulations, there is also a potential fundamental problem at the retail level.
Large retailers, as a whole, no longer systematically seek to drive down fuel prices in their outlets. These service stations account for more than half of fuel sales in France.
The Minister for Energy Transition, Agnès Pannier-Runacher, requested on Tuesday that fuel prices “fall faster” and that they reflect the decline in international oil prices. She said she considered it “unacceptable that companies increase their margins on the backs of the French”. A meeting on this subject with heads from the sector is scheduled for 11th May.
Photo Erik McLean on Unsplash