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Gasoline price drops to pre-war levels

Gasoline price drops to pre-war levels

Next Monday, a liter of simple 95 gasoline will drop by 10 cents, to 1,789 euros, hitting pre-conflict Ukrainian values. Relief is smaller in the simple diesel, which drops just 9 cents to 1,736 euros per liter.

Next Monday, when the consumer goes to fill up the car, he will feel great relief in his wallet. Declining for the ninth consecutive week, the average price of a liter of regular 95 gasoline is expected to fall by another 10 cents, from 1,889 euros to 1,789 euros, reaching pre-war values ​​in Ukraine, according to the General Directorate of Energy. and geology (DGEG).

he is The first time this fuel is lower than the pre-war values: On the eve of the conflict, on February 23, the price of a liter of simple gasoline was 1,816 euros, two hundred more than the prices that gas stations should charge next week.

Simple diesel should also be cheaper, but the drop is less expressive than gasoline: it should rise from 1.826 euros per liter (the average value indicated by DGEG) to 1.736 euros. A decrease of nine cents, however, maintains the value above the 1,660 euros recorded prior to the Russian invasion of Ukraine. The explanation lies in the fact that Russia is very strong on diesel, so its withdrawal from the market has a greater impact on this fuel than on gasoline. The question of the law of supply and demand.

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War broke out in Ukraine in the early hours of February 24. In the following weeks, fuel prices rose, largely as a result of the conflict and the blockade of Russian oil that the West had imposed as a punitive measure. On March 14, simple gasoline crossed the threshold of 2 euros per liter, and diesel was very close to this limit. Diesel crossed the €2-liter barrier later, in the week of June 13.

In recent weeks, news of a possible recession along with rampant inflation that could lead to stagflation with devastating effects has been ringing bells. Recall that at the end of July, the USA entered a technical recession. The world’s largest economy recorded a 0.9% decline in the second quarter of the year, after a 1.6% contraction in the first three months of 2022.

Under this scenario and the news that the United States has increased its crude oil reserves, the price of a barrel of oil has fallen in world markets. The average price of Brent crude this week recorded a decrease of more than 8% compared to the average last week, which explains another drop in fuel prices next Monday.

Gasoline and diesel prices continue to benefit from three easing measures implemented by the government and will be reassessed at the end of August. The ISP’s deduction equivalent to the drop in the value-added tax rate from 23% to 13%, offset by the ISP’s reduction of additional VAT revenue, and the suspension of a carbon tax update, has reduced fees by 28.2 cents on diesel and 32.1 cents on gasoline, according to the authority. Socialist Executive.

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