Luxembourg: Will fuel prices fall further?
LuxembourgWill fuel prices continue to fall?
LUXEMBOURG – Gasoline and diesel prices have been falling in Luxembourg since the beginning of August. Will this momentum continue? How is it explained?
- Thomas Holzer and Pascal Piatkowski
Record pump and fuel costs that have continued to rise over the weeks. Since the beginning of spring, the inflation in petrol and diesel prices has meant a significant loss of purchasing power for consumers. However, the momentum appears to have reversed in August with a series of fuel price cuts.
At €1,687 per liter, diesel hasn’t been that “cheap” since April 9th. As for unleaded 95, you’ll have to go back to March 2nd to find a currently valid price of €1,598 per litre. At that time, the war in Ukraine had only just begun and observers promised serious upheavals in energy costs.
Does this development mean a permanent inversion of the curve? “Predictions impossible,” replies Jean-Marczahlen, General Secretary of the Groupement Pétrolier Luxembourgeois (GPL), meaning that the course of the conflict in Ukraine will be decisive. As always, fuel prices in Luxembourg are directly linked to the geopolitical context.
New streams and increased production
The same international factors explain the declines that have been recorded in recent days: “This is mainly due to the fall in the price of ex-refined products,” replies Mr.zahlen. Since the embargo on Russian oil, the actors have found “new streams” of explanations for this. “Forwarders have reorganized their distribution, even if it took time to establish these flows,” he specifies.
A further development of the financial logic also with “less anticipation of the market”, but also changes in production. The decision by the OPEC countries to slightly increase production is bearing fruit. Recent meetings between Western and Gulf leaders may have influenced this decision, although some regret a very limited increase in crude oil volumes promised to the world market.
“It is very difficult to isolate the impact of all these factors,” says Jean-Marczahlen. It should also be borne in mind that the discount of 7.5 centimes per liter of fuel decided by the government was extended for the month of August. However, it is not renewed at the beginning of the school year.