Fuels at the highest, thank you the TICPE - Leblogauto.com

Fuel prices have been skyrocketing for weeks. We are breaking records and we even find fuel for more than 2 €/l. But why ? Knowing that the barrel is much cheaper than in 2014 for example?

According to weekly figures from the Ministry of Ecological Transition made public yesterday, a liter of super SP95 sells on average at 1.7249 euros, the SP95-E10 at 1.6992 euros and the SP98 at 1.7854 euros. As for diesel, the liter was on average at 1.6540 euro. We are breaking the records of 2018. Diesel then reached around €1.55/l. In October 2018, we had a barrel of oil at roughly the same price as today. It is therefore not totally absurd that the price at the pump is more or less the same.

But in 2014, we had a barrel above 125 dollars. However, diesel was between 1.30 and 1.35. By what "magic" do we have a cheaper barrel and more expensive diesel? Already, oil is bought in dollars. It is therefore necessary to take into account the euro/dollar parity. In 2014, 1 euro was worth between 1.35 and 1.40 dollars. A barrel at 126 dollars was therefore bought for around 90 euros. The barrel currently at 85 dollars can be bought at 75 euros (parity 1 euro is worth 1.13 dollars). The difference in euros is therefore smaller than one would think.

The TICPE as the first culprit

We must also consider inflation. 1 euro from 2014 is worth 1.07 euros from 2022 according to France Inflation. The 90 euros of 2014 are worth 96 euros of 2022. A little more than 20 euros difference on the barrel and yet 30 cents more at the pump! If we look at the difference on the SP95, it is lower, by around 15 cents. SO ? Mystery ?

Well, you have to look at taxation. The TICPE (Domestic Tax on the Consumption of Energy Products) has evolved considerably. In 2014, it cost €60.69/hl (or €0.6069/l) for the SP95. In 2022, it is €68.29/hl. Per litre, excluding tax, it therefore costs 7.6 cents more. That is 9.12 cents once VAT is added.

Concerning diesel, the TICPE went from €42.84/hl in 2014 to €59.40/hl in 2022. 16.56 euro cents per liter of diesel, excluding tax. This gives 19.88 centimes per liter including VAT. We already understand more how fuel prices are breaking the ceiling. We add increases in production and distribution costs and we have the increase that we see despite a barrel cheaper than in 2014.

Increase in the mileage scale to target the boost

To give a "boost" to the wallets of the French, the government could therefore temporarily lower the TICPE. But, 1 cent of a drop, 500 million euros per year disappear.

The track chosen is to target (ie. restrict) declines. Thus, the mileage scale used to calculate expenses and income tax deductions will be raised by 10%. A way to return in the form of a tax cut one or a few hundred euros for those who drive a lot to go to work. According to estimates, 2.5 to 5.6 million households could be affected. The cost to the state would be less than a general reduction. Funny thing, this 10% increase could also concern electric vehicles.

Going beyond the price

Between 2014 and 2022, the gross monthly minimum wage, according to INSEE, rose from €1,445.38 to €1,603.12. €1.35 therefore represented 0.093% of the monthly minimum wage. In 2022, €1.65 represents 0.103% of a monthly minimum wage.

The price of SP95 (approximately €1.55/l) represented 0.107% of the monthly minimum wage for 2014. This year, €1.72/l represents 0.107% of the monthly minimum wage for 2022. An increase in gross value offset by the increase in the minimum wage for SP95, but not enough for diesel.

If we relate to the average salary, it should be €40,900 this year, or €3,408 per month. In 2014, it was €36,124 per year, or €3,010 per month. If we relate the price of diesel to the average wage, we obtain 0.045% in 2014 and 0.048% in 2022.

On the price of SP95, this gives 0.052% in 2014 for 0.050% in 2022. Same observation, the price of SP95 remains constant in relation to its minimum and average wages. It drops even if we consider the E5 or the E10, slightly less taxed. On the other hand, diesel, mainly used by large rollers, has increased significantly and this is not just an impression.

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