French authorities will conduct 500 tests at service stations around the country to ensure fuel prices are not being artificially inflated, Prime Minister Sébastien Lecornu announced Sunday (March 8).
The checks will take place between Monday and Wednesday (March 9- 11) at locations across France.
It comes as the conflict in the Middle East and closure of the Strait of Hormuz to most traffic has caused oil prices to surge.
The average price for a barrel of Brent crude oil (the international benchmark for oil prices) is now above $100 – levels not seen since 2022.
This has, in turn, seen fuel prices increase across the world, including in France, where petrol prices increased by some 11 cents per litre last week, and up to 28 cents for diesel.
SP95-E10 petrol was selling for an average of €1.82 per litre on Friday (March 6), compared to €1.71 on February 27, the day before the conflict started, a 6% increase, and SP98 petrol was at €1.92 per litre on Friday, 10 cents more than on February 27
Diesel (gazole) was selling for an average of €1.98 per litre on Friday, compared to around €1.70 on February 27, an increase of 28 cents (+16%).
Prices are expected to have increased over the weekend, although note there can be significant variations between service stations – hence the checks.
You can use the government’s official fuel price comparison website to check prices near you.
Unprecedented surge in price
A sharp rise in fuel prices was last seen following the start of the war in Ukraine in 2022.
However, the wider global instability – the Strait of Hormuz is used to transport around a fifth of global oil and liquefied natural gas traffic – has seen a greater impact.
“I have experienced some crises, but I have never seen such a sharp increase in such a short time,” said Secretary General of the French Federation of Fuels, Petroleum Products and Heating (FF3C) Frédéric Plan to FranceInfo on Sunday (March 8).
Why are prices rising so quickly?
The increase in crude oil prices affects service stations, which need to pay a higher cost to refill their supplies. This increased cost is passed on to the consumer.
Suppliers pass on the cost of refilling supplies to drivers (as opposed to the price they paid for fuel currently in the pumps), leading to an almost-immediate increase in costs when crude oil costs rise.
In theory, this means as more fuel becomes available – following increased production, the end of a crisis, etc – and prices of crude oil drop, so should prices at the pump. However the price reduction for drivers can take longer to show than a price increase at the onset of a crisis.
Service stations managers have criticised refineries for an early increase in prices, leading to higher costs despite fuel availability.
Refineries (companies such as Esso, BP, Shell, and Total etc) “which have stockpiles… need to explain themselves,” said head of E.Leclerc supermarket group Michel-Edouard Leclerc.
"The refined fuel price has rocketed at the same time as that of crude oil," he said, despite refined fuel taking around three weeks to reach service stations - the implication being that fuel already-refined could be supplied at the previous price and not priced to reflect the later increase in crude prices.
Government spokesperson Maud Bregeon said it remained too early to discuss any type of fuel relief for drivers in France, such as the fuel subsidy rolled out following the start of the war in Ukraine.
What about fuel reserves?
EU countries including France are required to maintain emergency reserves of oil and gas, equal to three months worth of imports.
As this is an emergency reserve the fuel cannot be released into the supply chain without coordinated approval.
It is separate from the fuel supply that service station providers purchase, which comes from the global supply chain.
Many EU countries including France are also part of the International Energy Agency (IEA) alongside the US, UK, Australia, Canada amongst others.
The IEA holds and manages a reserve supply of oil, kept back from the market in the event of an emergency.
It is currently debating releasing part of the fuel reserves into the global supply to reduce oil prices, a move which several countries including the US back.
The US is looking for 300-400m barrels of oil to be released - thought to represent some 30% of the emergency supply - to ease the crisis.
A G7 meeting today will discuss a possible release of the reserves.
The IEA has authorised five emergency supply releases since 1974, two of these coming in the wake of the war in Ukraine.
Separate from any IEA plan, EU officials will meet on Thursday (March 12) to discuss the release of some of its emergency reserves.
However a prolonged conflict and closure of the Strait of Hormuz would make it harder to re-stock these emergency supplies, particularly while global prices remain high.
