The current rise in oil prices does not call into question the general trend of slowing inflation, the governor of the Bank of France, François Villeroy de Galhau, said this Saturday, although he said he was “attentive” to its variations.
“Obviously we are attentive” to this issue, he stressed on France Inter, before putting into perspective the general effect on inflation of the increase in fuel prices. “The variations in oil (…) do not call into question, in our eyes, the trend towards underlying disinflation. Our forecast and our commitment is to bring inflation towards 2% between now and 2025,” he stated, recalling the objective of the European Union. Central Bank (ECB).
“5% of our total consumption”
According to the Bank of France’s forecasts, after peaking in early 2023, total inflation should continue to decline to 4.5% annually in France in the fourth quarter of 2023, before returning to around 2% in 2025. “The price of oil and the price of gasoline at the pump is obviously very sensitive, but that is not total inflation. Gasoline consumption at the pump represents about 5% of our total consumption. So Therefore, it is a small part of the total inflation, although it is what is seen the most,” added the governor of the institution.
Fuel prices have increased considerably in recent weeks in France and are now approaching or exceeding the symbolic bar of two euros per liter. In response, the French government will authorize distributors to sell fuel at a loss (at a price lower than what they bought it for) starting in December, on a temporary basis. However, at a hearing in Parliament on Wednesday, leaders of big brands such as Leclerc, Carrefour, Intermarché and Système U flatly rejected this measure. In world markets, the price of a barrel of North Sea Brent exceeded $93 on Friday.
Source: BFM TV
