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As the Russian oil embargo is discussed, fears are growing of another sharp rise in fuel prices.

Russian oil embargo: should we be afraid of a sharp rise in fuel prices?

Nervousness could escalate even more right now as EU members are strongly considering an embargo on Russian oil, which accounts for a quarter of European imports.

“We will stop deliveries of crude oil to Russia within six months and oil products by the end of the year,” said European Commission President Ursula von der Leyen. “It won't be easy, but we have to do it. »

If the 27 do not find a favorable outcome to their negotiations for now, this embargo could cause gas station prices to panic again. We are summing up.

No supply problems

French Petroleum Industries Union (Ufip) assures actu.fr that it has been working on this scenario for several weeks now. And already be able to calm down in one thing: fuel shortage should not be.

There are no serious concerns about the supply of diesel and gasoline to France.

French Petroleum Industries Union

The European text, although not finalized, provides for a delay of several months between the adoption of a decision and the cessation of Russian oil imports. Gradual embargo by the end of 2022

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“Therefore, we have several months to organize and, above all, to reorganize,” Ufip explains. Therefore, this will require a revision of the terms of the contract and diversification of imports of precious black gold. Enough for the tanks to be full, and without Russian oil.

Why prices might rise

According to Olivier Gantois, president of Ufip, "we cannot accurately predict that a price increase may occur."

And the explanation is clear: Europe depends on Russian oil, which accounts for 25% of its oil imports. Therefore, we have to rethink a few things, and the reorganization of the market will incur costs.

"Today, the scheme has been optimized to keep costs as low as possible," confirms Ufip. “Tomorrow we will have to import from India, the Middle East or even North America, which represents additional costs. »

In addition, Ufip assures that “Russia is trying to sell off its reserves, and therefore sell them at a lower price. Non-Russian oil is more expensive. »

And in the short term?

If prices rise again within 15 days, it is also due to the fact that the oil markets have been very nervous since the start of the economic recovery associated with the end of the health crisis.

“More demand, so the price goes up. It makes sense,” said the president of Ufip in a previous article.

And with the war in Ukraine and the US and UK embargo on Russian oil, the market is even more tense. This Thursday, May 5, the price per barrel is $110, while before the invasion of Ukraine it was at the level of $96.

Markets will be even more nervous in the event of an embargo, there is a risk of consequences for gas station prices.

French Petroleum Industry Union

At the same time, a market that relies solely on supply and demand with no other rules can quickly become tense in the event of an announcement. And prices are rising.

France spared a little?

France with all this is not in such an uncomfortable position. First, we have to look at the current situation.

We import 10% of Russian oil. As for diesel fuel, 25% of our imports comes from the Siberian steppes. “In 2021, 25 million tons were imported, including 6 from Russia,” notes Ufip.

Therefore, France is less dependent than Europe. Another advantage, "oil supplies from France are carried out by tankers (tanker carrying oil, Ed. note), and not by pipeline", which means they say that we are better connected with other oil-producing countries.

France has a privileged oil import geography.

French Petroleum Industry Union

France is doing well in terms of energy dependence. What about prices?

"The 15 cent rebate from the government was well thought out and came at the right time," Ufip says. “This allows us to be in the middle of prices compared to other countries in the European Union. »

If it doesn't compensate for the increase, it will amortize the cost to motorists. Discount must end on July 31. Will it be expanded? franceinfo guest, Ecological Transition Minister Barbara Pompili announced that the government is working on a replacement of the fuel discount or that the device can be extended. as needed.

If we see that we need to expand for many reasons, we will extend. In any case, we will not leave our fellow citizens without a solution.

Barbara PompiliMinister for Ecological Transition

One idea is to target the measure to those who need it most, such as big players. The government is working on it: this new aid could be ready by summer.

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