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The $10-Per-Gallon Gas Has Arrived, In Paris

testosteronepit's picture





 

Wolf Richter   www.testosteronepit.com

In early December, Christophe de Margerie, CEO of Total, the Exxon à la Française, shocked the French when he said that there was "no doubt" that a liter of gasoline would reach €2 and that the only question was when. He cited the calamities in the news at the time to justify the skyrocketing prices of oil and gasoline—source of Total’s mega profits. He was talking his book, obviously, which isn't illegal, not even in France.

And now, €2-per-liter gasoline has arrived! More precisely, it has arrived at a gas station in the Rue Saint-Antoine in Paris, not far from the Bastille, in the 4th arrondissement. I used to walk by it every day an eternity ago when I lived in “le Marais” as the arrondissement is called. It’s a tiny gas station with rip-off prices by a parking garage entrance. And now it had the audacity to be the first in France to charge €2.02 per liter. $10 a gallon.

It was reported on Carbeo.com, a site that tracks gas prices across France, and then made the national news, though it must have done little to bring business to the station. The national average, which has been hitting all-time highs since late last year, was €1.62 ($8 per gallon) as of last week, also a record, according to the Ministry of Sustainable Development—they have a ministry for everything in France.

Fuel is taxed heavily in France (and in Europe), which explains part of the difference in price to the US. But now there is an additional reason. In 2008, when gasoline in the US hit all-time highs, the euro was strong against the dollar, and since oil is priced in dollars, Europeans got a sweet deal, or at least they didn’t feel the pain as much. But the weaker euro has changed the scenario, and record gas prices have been washing over the Eurozone for months.

The tab is rising. France paid a record €61.4 billion in 2011 for its energy needs, an increase of 32% over prior year. It amounts to 3.1% of GDP, up from 2.5% in 2010. Most of that increase is due to the rising price of oil as measured in euros. Electricity—the 59 nuclear power plants of state-owned EDF generate 78% of the country’s power—played only a small role.

Consumers, who have to absorb the majority of the oil price shock, are reeling. And they might kick France into a recession. Even Mario Draghi, president of the ECB admitted it when he said that it could heat up inflation—after graciously handing a trillion euros to his banker cronies since he came to power in November last year. The goal of these “Long Term Refinancing Operations” was to drive up the value of sovereign bonds of debt sinner countries in the Eurozone. But it seems to be hitting oil as well.

As in the US, the price of fuel has become a hot item in the presidential election. Socialist François Hollande, still the frontrunner, trotted out the idea of capping fuel prices, which President Nicolas Sarkozy, in his deadpan manner, called a “joke.” But Hollande has other ideas as well. Most intriguingly, he offered his compatriots a new 75% income tax bracket aimed at the chieftains of the largest corporations and banks. Instant revolt. Not among his targets, but in the world of soccer, the people’s sport. For how this has mushroomed into a calamity for Hollande, read.... Killing a 75% Income Tax.

Sarkozy has his own demons to fight. Five years ago, he ran on a platform of reforming the economy. One of the planks was the relaxation of the 35-hour workweek. “Work more to earn more" was his slogan. But since then, nagging voices have turned it into "work more to earn less" and now "work more to fill up your tank”—which may cost over €100 ($130) even for a smallish tank.

And then France woke up to the news—quelle horreur—that Sarkozy, their presumed loser, was suddenly ahead in the polls. Amid all this chaos, two fundamental cross currents in the French economy went practically unnoticed, though they should have caused an outburst of national soul searching. Read.... Plot Twist While French Businesses Are Dying.

 


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Fri, 03/16/2012 - 11:19 | Link to Comment Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Good news = bullish

Bad news = bullish (it could be worse!)

Neutral news = bullish (at least it's not bad!)

Fri, 03/16/2012 - 11:03 | Link to Comment NEOSERF
NEOSERF's picture

Squeeze corn bitchez

Fri, 03/16/2012 - 10:50 | Link to Comment cornedmutton
cornedmutton's picture

Let's see...

38.7 gallon tank times $10/gallon...

Uh-oh.

Fri, 03/16/2012 - 10:00 | Link to Comment Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Just as war on the rich will not work, the rich need to also understand their war on the poor will not work.  If U collapse the lower ranks, everything collapses in a heap.

No one will learn to accept these laws of nature.  It's like the food chain.

Americans forget that the USA used to have super high taxes on the rich, when the country was @ its so-called strongest.  The rich in the USA always talk about those days lovingly, but leave out the high taxes of the time.

It doesn't really matter now, the fascist USA economy is screwed & so is the socialist French economy, sucked dry by deficit spending & central bank counterfeiting.

Fri, 03/16/2012 - 09:32 | Link to Comment boiltherich
boiltherich's picture

Gas only costs a few cents more in Paris or London or Amsterdam than it does in California, roughly $4 and a few pennies, per gallon, maybe $4.25, the rest is taxes.  I am sure they have their reasons for using gasoline consumption as a major part of their tax base, just as they use prohibitively high VAT's as a major part of their taxation systems, but there is no argument that ultra high taxes on fuels and a VAT on everything kills consumption and while they are hardly even noticed by the wealthy they strangle the middle class and keep the poor poorer, though in France a lot of what is collected goes to alleviating poverty. 

Now all they have to do is add on another 100% for a carbon tax and viola, $20 per gallon.  And it will make no more sense then to compare to US prices than it does today.  Might as well compare it to Venezuela at 12 cents a gallon.  Or, some of the Baltics like Estonia where it is still around $3.75, or Moscow where you can still get it for $2.20.  It is no more valid than comparing the price of a pack of Marlboro in NYC at US$7.50 and the price in Turkey at US$0.80. 

Any discussion of pump prices paid by consumers around the world is more a discussion of their nations tax policy than it is about the price of fuel, just as it would be if we were talking about the price of a cigarette.

Fri, 03/16/2012 - 13:02 | Link to Comment Vashta Nerada
Vashta Nerada's picture

Exactly.  And where did this 'mega profits' term begin to apply to Total or Exxon?  Last time I checked (half hour ago), MSFT and APPL had profit margins of +/- 30%, KO and PEP had profit margins of around 20%, and XOM had a profit margin of 9%. 

Fri, 03/16/2012 - 08:21 | Link to Comment ZeroPoint
ZeroPoint's picture

Thank goodness Europe is no longer buying oil from Iran....

Fri, 03/16/2012 - 06:06 | Link to Comment Sandmann
Sandmann's picture

France charges Road Tax in the petrol price whereas Britain charges $9.50/litre PLUS Road Tax of between $350 and $900 a year so French petrol is cheaper

Fri, 03/16/2012 - 05:37 | Link to Comment blueridgeviews
blueridgeviews's picture

Lucky for the French they don't need to drive for 2 months of the summer, and during the rest of the year they mostly sip wine at their local cafe. $10/gal? No big deal, only the rich drive in France.

Fri, 03/16/2012 - 08:31 | Link to Comment Silver Dreamer
Silver Dreamer's picture

Only the "rich" will be driving in America as well.  The American concept of a house and two cars is coming to an abrupt end.

Fri, 03/16/2012 - 09:52 | Link to Comment debtandtaxes
debtandtaxes's picture

Make your 2nd - or only - car a motorcycle. In Toronto's core, they park for FREE!

Fri, 03/16/2012 - 04:17 | Link to Comment Dull Which
Dull Which's picture

I am paying £1.45 a litre and have been north of £1.35 for a year. That's $2.27 a litre, which IIRC is $8.60 a US gallon (3.78l), but $10.30 for what I would call a gallon (Imperial= 4.54l)). Diesel is more expensive...

Fri, 03/16/2012 - 00:38 | Link to Comment AndrewCostello
AndrewCostello's picture

Petrol has always been between $8 and $10 a gallon overseas.  It's only countries like America that subsidize fuel where it is cheaper.  As those subsidies become unsustainable, then you'll see those prices here too - eventually.

But don't expect this to happen overnight.  The politicians will hold out as long as they can, in order to keep their jobs.

 

Read this, if you'd like to be prepared when it does happen.

http://www.amazon.com/Simple-Wealth-Mr-Andrew-Costello/dp/1463523017/ref

 

 

Thu, 03/15/2012 - 23:58 | Link to Comment nah
nah's picture

back to your farms theres nothing to see here bitchez

Thu, 03/15/2012 - 22:31 | Link to Comment q99x2
q99x2's picture

Can't afford to get to work.

Thu, 03/15/2012 - 22:37 | Link to Comment Youri Carma
Youri Carma's picture

Guess cause you havn't got a home to do homework ;)

Thu, 03/15/2012 - 22:27 | Link to Comment Youri Carma
Youri Carma's picture

No it didn’t!

It arrived in The Netherlands –> February 18, 2012

Dutch Gasoline Prices To New Record High of $10.738 a Gallon (€1.795 a Litre) – (google trans from Dutch) http://tinyurl.com/8ywxhgz

Do your homework!

Thu, 03/15/2012 - 20:51 | Link to Comment frenchie
frenchie's picture

hm

Le Marais is the jews' and sodomites (modern language: "gays") quarter in Paris...

Thu, 03/15/2012 - 20:19 | Link to Comment Itinerant
Itinerant's picture

Normal gas (regular) is now 8,95/ liter here, more at highway service centers (Netherlands)

That's more expensive in €uros than in 2009, but in dollar$ it's cheaper now (was trending toward $10/gallon then).

Thu, 03/15/2012 - 21:59 | Link to Comment Zero Govt
Zero Govt's picture

it's not so much the oil is expensive, more the fat worthless parasitical scum (300% Tax) floating on top of the liquid

Thu, 03/15/2012 - 19:54 | Link to Comment MrSteve
MrSteve's picture

This is not how good news sounds...

Thu, 03/15/2012 - 23:14 | Link to Comment sun tzu
sun tzu's picture

It must be bullish. Prices are rising due to demand from the economic recovery. Don't you believe what your masters and their media whores tell you?

Fri, 03/16/2012 - 02:34 | Link to Comment TPTB
TPTB's picture

Bicycle Ipad is a completely untapped market.

Thu, 03/15/2012 - 19:51 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

Posted: Mar 14, 2012 4:43 PM EDT Updated: Mar 14, 2012 6:46 PM EDT


 Chesapeake Energy today announced an agreement to build the largest integrated midstream service complex in eastern Ohio.

Officials in a press release said Chesapeake has entered into a partnership with M3 Midstream LLC and EV Energy Partners ,LP.to develop the midstream services complex in Harrison County, just outside of Scio.

The press release states the complex will provide necessary infrastructure to process natural gas liquids into the liquids-rich Utica shale play.

Chesapeake energy announced it will invest $900-million dollars  to build the complex that will process the natural gas that' s being pulled from the ground all over the area

Sources told wtrf.com  that Chesapeake has signed a deal to purchase property known as the old Reese Farm.

County officials said it's perhaps the biggest news since 1932 when the Scio Pottery was founded, once employing hundreds.

The Hub complex will be in Harrison County and the state-of -the art cryogenic processing facility will be located in Columbiana County.

http://www.wtrf.com/story/17159474/harrison-county-gets-new-complex-to-p...

 

''Chesapeake is announcing the discovery of a major new liquids-rich play in the Utica Shale,'' the report said, noting that the finding was based on two years of ''proprietary geoscientific, petrophysical and engineering research.''

Chesapeake's report indicated that the discovery could be worth a $15 billion or $20 billion increase in company value.

"The company believes the Utica Shale will be characterized by a western oil phase, central wet gas phase and an eastern dry gas phase," the report said. Also, it said Utica Shale should be "economically superior to the Eagle Ford Shale

in South Texas."

The news of Chesapeake's announcement spread quickly, and Gov. John R. Kasich responded Thursday evening.

''This is huge news for Ohioans and I'm simply thrilled to hear it,'' he said. ''I'm especially glad that this can mean a shot-in-the-arm for eastern Ohio.''

Kasich said his administration will focus on maximizing ''job creation and environmental stewardship,'' and referenced a energy policy summit scheduled for September. He said natural gas and oil play could lead to long-term earnings in well services, pipeline instillation and energy processing.

"I believe that we could be at a beginning of a new and extended positive chapter in Ohio's economy," he said.

Thu, 03/15/2012 - 19:06 | Link to Comment Zero Govt
Zero Govt's picture

"Fuel is taxed heavily in France (and in Europe)"

No kidding ...we're taxed to friggin death, cradle to grave, in this leftie paradise (socialist shithole)

You Yanks ever wondered why Europeans look palid and bruised? Have you got green lightbulbs yet?? You can't see shit when you turn them on for 15 minutes and knock your furniture or trip over the bath/toilet/b-day 

i don't give a fuck about saving the planet, i just want the lights to work

If we ever go to war again in the next few years pleeeease bomb our green lightbulb factories first... Thank you so much

Fri, 03/16/2012 - 11:24 | Link to Comment Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

You're broke. America's broke.  The bankers run France, the bankers run America. What's the difference?  At least France looks nicer.  Also, your population will riot & take to the streets.

Fri, 03/16/2012 - 06:10 | Link to Comment Sandmann
Sandmann's picture

Blame GE, Philips and Osram for CFL bulbs. They were making no money out of tungsten bulbs so lobbied for CFL to boost their margins. Then the UK Government forced Utilities into "green levies" which they could pay by subsidising CFL bulbs to consumers in retail outlets. So CFL bulbs making increased profit for the Cartel were subsidised by levies on Consumer electricity bills levied by another Cartel

Thu, 03/15/2012 - 22:10 | Link to Comment jwoop66
jwoop66's picture

We're right behind you, brother.    Half of us look to you as the standard.  We just need to get our man re-elected and we'll be on our way!

Thu, 03/15/2012 - 18:56 | Link to Comment Hobbleknee
Hobbleknee's picture

How much of it is tax?

____________________

Compare gold and silver prices

Thu, 03/15/2012 - 19:03 | Link to Comment hairball48
hairball48's picture

Who knows? How much is tax doesn't matter to the average sheeple, or to me either as a practical matter.

Hopefully, I'll be watching the $10 gasoline riots and mayhem from up here :)

http://i1198.photobucket.com/albums/aa451/pocketlint48/Hairball/P9150119b.jpg

Thu, 03/15/2012 - 18:35 | Link to Comment apberusdisvet
apberusdisvet's picture

$10 gas would mean $10 bread and $10 gal of milk.  I could go further, but you get the point, right?

Thu, 03/15/2012 - 18:25 | Link to Comment hairball48
hairball48's picture

close your eyes for a minute and imagine 10 dollar gas in the united states of america

.

The resulting "firestorm" will not be metaphoric.

Thu, 03/15/2012 - 18:32 | Link to Comment Seb
Seb's picture

I don't think so. 10 dollar/gallon is still affordable for USA.

Thu, 03/15/2012 - 18:51 | Link to Comment Buck Johnson
Buck Johnson's picture

Thats BS, 10 dollar a gallon gas isn't affordable in the US.  It would sink this economy even faster than what it is doing now. 

Fri, 03/16/2012 - 11:25 | Link to Comment Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Uh, what economy are U talking about?  There's still 1 left?

Thu, 03/15/2012 - 19:49 | Link to Comment espirit
espirit's picture

I sure as hell wouldn't be using $10 US per gallon to burn during "le picnic", but perhaps during "le cocktail".

Fri, 03/16/2012 - 08:14 | Link to Comment Antifaschistische
Antifaschistische's picture

The awesome factor about $10 per/gallon gas in the US is that the US "Public Transit" agencies ALL run large negative ROIs.  Meaning, as people pile onto America's third rate transit systems....they will need more diesel, and since every bus trip means they need more subsidies....ok, you get it.

High gas prices will sink America's Public Transit Infrastructure.  The only way to save it will be to a) drop an extra hundred billion into Public Transit from the FTA or b) end the cheap ride fantasy and start charging $5-$10 to step onto a bus.

Fri, 03/16/2012 - 11:26 | Link to Comment Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

If buses were $5-$10, may as well hop back into the car!

Thu, 03/15/2012 - 18:22 | Link to Comment Tom of the Missouri
Tom of the Missouri's picture

Wow, and to think that Secretary Chu and the Obama Mieister thought (and still secretely think if the truth be known, despite their latest lies to the contrary) that we should emulate European gas prices to help insure our prosperous green energy future.  Whether it is a achieved by Eurpoean levels of taxation, drilling moratoriums or Arabian/Pershian wars I am sure makes little difference to them in their search for their green utopia.   That would be about $200 to fill my SUV.  Yeah that's the ticket. That would sure jump start the economy.  Actually it would jump start a few more oil rigs.  Anyone want to drill in my back yard? Don't care if you mess it up, it is not worth anything anymore anyway.  Might as well tap the mineral rights.  If we do it at night maybe we can skip the permits. We can call it boot leg oil. Think of it as like crack or meth production economics.  No shortage there.    Liquid Gold indeed, with my apologies to Jed Clampett. 

I think Chu and O also bragged the other day that under their Godlike direction oil import and and gas consumption are down.  Well, duh!  Wipe away half of all citizens life savings with a real estate collapse, create massive un and under employmentand, kill business with hyper regulating, depreciate the currency people use to buy gas with  and what do they expect.   

I can't wait till they try to Jimmy Carter us by trying to regulate the price.  The resulting gas lines on the news will hurt their reelection prospect though.  Maybe not though if Mitt Romeny then brings back out Gerald Ford's old WIN buttons.  Mitt does come from that wing of the Republican Party.

 

P.S. Hey Wolf, I downloaded and checked out that little book of yours the other day - the one about your time with that China Girl (Ok, ok, I know she was Japanese, but you know what I mean) . I enjoyed it very much.   What a way to get a guy's mind off his failing busineeses and the depression.  When are you going to finish it? Or could you not top her and decided to stop?   She would be hard to top.

 

Fri, 03/16/2012 - 11:08 | Link to Comment Flakmeister
Flakmeister's picture

Your partisan bile is so thick that you cannot see the truth....

Not to mention your history is off...

Obama is a clown, but high gas prices ain't his fault...

Thu, 03/15/2012 - 21:15 | Link to Comment disabledvet
disabledvet's picture

You forgot the bailouts and the "price controls in the bond market." Don't know who Wolf is Mr. Tom of the Missouri. This came to mind though:
http://www.youtube.com/watch?feature=player_detailpage&v=vj-15O-BTDw

Thu, 03/15/2012 - 18:20 | Link to Comment bankruptcylawyer
bankruptcylawyer's picture

Le mans is going to get expensive this year. Id like to see a class 4 for production vehicles soelling for under 50k

Thu, 03/15/2012 - 18:14 | Link to Comment non_anon
non_anon's picture

i see the "can can" is coming back

Thu, 03/15/2012 - 17:53 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

The Frogs have  regional rail lines many of these decommissioned to pay for the TGV in the 70s  - they are beginning a programme of bringing these back on line using the new Train Tram concept.

 These are operated by either a skeleton DMU service , just a token cargo service or completly out of service post war but almost all have not been cut to pieces by Roadworks given its post war Independent Gaullist & planning heritage.

The 64km Nantes to Chateaubriant line is now expected to cost 200Millionish when completed in early 2013
http://www.nantes-chateaubriant.paysdelaloire.fr
So if this new Tram train programme ever accelerates - a modest 4 Billion a year programme could produce 1280KM of electrified line + vehicles a year for the cost of a cheap Nuclear plant(don’t mention the EPR……)
http://www.youtube.com/watch?v=Rs47-o9oi4g

www.youtube.com/watch?v=YoSBIEsMG5w

Towns such as fr.wikipedia.org/wiki/Auch and fr.wikipedia.org/wiki/Agen will probally be linked again via Tramtrain I imagine.(Auch for example has a Skeleton DMU train line running out of Toulouse but is strangely rail seperated from its closest neighbour – fr.wikipedia.org/wiki/Ligne_de_Saint-Agne_à_Auch)
The Auch Agen service ended in the early seventies with just the occasional cargo train using this branch line these days.
en.wikipedia.org/wiki/Agen–Vic-en-Bigorre_railway
Still I think it almost certain lines like these will be brought back on line especially since Agen train station has been improved with TGV services recently.
France has the capacity to raise its game due to its Geography & heritage but Mountainous isolated Greece with multiple islands is in real trouble.

Thu, 03/15/2012 - 21:18 | Link to Comment disabledvet
disabledvet's picture

I've read that in France "only the lower classes live in the suburbs." I imagine they must think we Americans are...are...are..., eh forget it.

Thu, 03/15/2012 - 17:04 | Link to Comment El Oregonian
El Oregonian's picture

J.P. Morgan whistle-blower busts company with open letter on comment section of CFTC website.

Copy and paste and save because it will be scrubbed shortly.

comments.cftc.gov/PublicComments/ViewComment.aspx?id=57019&SearchText

Thu, 03/15/2012 - 17:38 | Link to Comment blunderdog
blunderdog's picture

No need to scrub that, there's no real content.  But it'll be nice if more credible and sourced information appears.

Thu, 03/15/2012 - 17:15 | Link to Comment I think I need ...
I think I need to buy a gun's picture

close your eyes for a minute and imagine 10 dollar gas in the united states of america

Thu, 03/15/2012 - 19:57 | Link to Comment FeralSerf
FeralSerf's picture

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Thu, 03/15/2012 - 19:56 | Link to Comment FeralSerf
FeralSerf's picture

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