Value of the euro, price of a barrel, geopolitical context... We explain why fuel prices are at their lowest

Pump prices for diesel and unleaded 95, the two most widely used fuels, were falling at the end of July. This was due to a multitude of favorable economic factors.

During the holiday season , filling up is less expensive than usual for motorists. Prices at the pump were down in July compared to the same period last year, according to data from the Ministry of Ecological Transition consulted by franceinfo on Friday, August 1 .

In detail, the average diesel price was 1.6279 euros per liter, eight cents less than in July 2024. Prices had not been this low since July 2021. The observation is quite similar regarding the price of a liter of unleaded 95, which sold on average at 1.6694 euros per liter, or 13 cents less than in July 2024. How can this phenomenon be explained?

"Taxes are fairly stable, with variations largely due to the price of a barrel of oil," Jean -Pierre Favennec, a consultant and professor at Paris-Dauphine University, explained to franceinfo. "Since 2021, there has been an economic recovery following the Covid crisis, which was accompanied by very strong demand for oil, and therefore a rise in prices. The war in Ukraine has also pushed prices to very high levels," the specialist explains.

In 2024, global economic growth, particularly in China, was relatively weak, leading to a decline in demand for oil. And the widespread availability of this commodity in producing countries such as the United States, Guyana, and Brazil further contributed to the fall in the price per barrel.

Added to this was "a desire among OPEC [Organization of Petroleum Exporting Countries] countries to increase their production to regain market share." As the volumes extracted increase, oil becomes less scarce and its prices fall.

At the same time, the euro is at its highest level since 2021 against the US currency. However, the dollar is the currency in which oil purchases are made. " With an increasingly strong euro, it costs less at the pump," Francis Pousse, president of the service stations and new energies branch within the Mobilians trade union, explained to AFP in September .

The geopolitical context, relatively calm at the end of July, finally confirms this trend. After having climbed at the time of the conflict between Iran and Israel , the price of a barrel of oil has stabilized around 70 dollars (60.6 euros) , underlines Edouard Lotz, energy market consultant at Omnegy, on BFMTV .

It remains to be seen whether this trend will last. "The main producers, led by Saudi Arabia and Russia, have an interest in ensuring prices don't remain too low. If the barrel rises by a few dollars, then the price of gasoline at the pump will increase by a few cents in the coming weeks," predicts Jean -Pierre Favennec.