The equation is relentless: when oil prices rise, consumer prices rise and inflation is boosted. “Disinflation will be slower than expected”, admits Mathieu Plane, economist at the French Observatory of Economic Conditions. In its most recent forecasts, published on Thursday September 7, the National Institute of Statistics and Economic Studies (Insee) was based on the hypothesis of a barrel of Brent at 79 euros until the end of 2023. Under these conditions, it estimated that inflation would reach 4.8% over twelve months in September.
“ If we were to redo the forecast taking into account the rise in the price of oil, we would probably be between 0.1 and 0.2 points of inflation more, or rather around 5% in September”, underlines Julien Pouget, head of the economic situation department at INSEE. We must also take into account a “base effect”: in the fall of 2022, fuel prices were reduced by the rebate at the pump of ten euro cents per liter, which ended on December 31. The increase experienced today by the consumer is therefore higher than just the increase in the value of the barrel.
The rise in black gold prices penalizes the economy in two ways: first directly, by having an almost immediate impact on the price of fuel at the pump or that of domestic heating oil. It then affects inflation through the “energy” item, which accounts for 8.8% of the index.
Faced with rising prices at the pump, the President of the Republic, Emmanuel Macron, announced, on Sunday September 24, aid of a maximum amount of “one hundred euros per car per year” destiny “to the lowest 50% of workers”. He also noted the categorical refusal of distributors to sell fuel at a loss, as the government had envisaged. In place of this measure, the Prime Minister, Elisabeth Borne, “go gather [la semaine du 25 septembre] all stakeholders in the sector and ask them to do so at cost price”indicated the head of state.
The rebound in black gold prices then has an indirect effect, through production prices in industry, or the cost of transporting raw materials and goods, or even by making certain services, such as air transport, more expensive. . “ This effect is felt later, sometimes over several quarters, but it is not negligible”underlines an expert from the Bank of France.
“Incommensurate with 2022”
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