Petrol prices pile pain on European consumers

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Petrol prices pile pain on European consumers

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The centre of Paris is not the best place to buy petrol, as hypermarkets are far away in the suburbs and a lack of competition means some filling stations are gouging motorists mercilessly.

However, all over Europe consumers are groaning at the spiralling petrol and diesel costs, even if not everywhere is facing Parisian prices.

“2.02 euros for a litre of 95 unleaded? It’s too much…it keeps going up, it doesn’t stop. Where’s it going to end?” said one commuter, and he was riding a thrifty moped.

The disparity between the price of a litre of oil and a litre of refined fuel is enormous, and mostly because of taxes, which will not fall as long as governments are strapped for cash.

Then there are supply-side problems. Non-OPEC producers are struggling to increase production, and OPEC itself has little spare capacity. Lead producer Saudi Arabia is already pumping nearly 10 million barrels a day, a near 30-year peak in output.

World demand for a finite product continues to rise, while new discoveries fail to keep pace with that booming demand, mostly from Asia. The only check on rising prices appears to be that they may in themselves choke economic recovery and stifle demand, surely no economist’s suggested method of trimming pump prices.