The repercussions of rising fuel prices are escalating in France and other European countries, after the closure of the Strait of Hormuz or the restriction of navigation through it became a pressure factor on global energy markets, reflected in fuel and gas prices in Europe, and opened the door to a wave of popular and professional protests against the high cost of living and the decline in purchasing power.
Over the past weeks, France has witnessed scattered movements by groups that depend directly on fuel, including fishermen, farmers, drivers, and workers in the transport and construction sectors, before these movements intersected with student and broader demands protests in Paris and its suburbs, against the backdrop of a shortage of teachers, overcrowded classrooms, and the deterioration of public services.
According to European reports, the wave of protests that emerged on October 17 did not stem from a single cause, but came as a result of the convergence of several tracks, most notably the cost of fuel, the rise in living expenses, objection to the weakness of public services, social inequality, and policies related to spending and government support.
The French movements coincided with smaller protests in Italy, Portugal, and Belgium, although their demands differed from one country to another. In Portugal, demands related to wages, housing, and the cost of living emerged, while other movements in Europe were linked to the pressure of energy prices on families and productive sectors.
Observers believe that the closure of the Strait of Hormuz represented an external shock that increased the fragility of the European economic situation. The strait is considered one of the most important energy passages in the world, as large quantities of crude oil and petroleum products pass through it under normal circumstances, which makes any disruption in navigation within it a direct factor in raising shipping and insurance costs and reducing the supply available in global markets.
The crisis did not reach Europe because its countries rely exclusively on shipments passing through the strait, but because the energy market is global and interconnected. When supplies decline or the cost of transporting them rises, European and Asian markets compete for alternative shipments of oil, diesel, gasoline, and liquefied natural gas, which raises prices at fuel stations and increases energy bills for families and companies.
Pressures in the European market worsened with the rise in wholesale diesel prices in Rotterdam, the disruption of petroleum product shipping, the decline in Russian diesel exports, along with the impact on liquefied natural gas exports coming from the Gulf region. This caused an increase in energy costs for industry, transport, and agriculture, before the increase was passed on to the prices of goods and services.
In France, the street's sensitivity to fuel prices increased due to the widespread use of diesel in cars, businesses, and transport, and because the market depends to a greater degree on imports compared to the gasoline market. High taxes on fuel also contributed to raising the final price for consumers, as prices include taxes on energy consumption and value-added tax.
The crisis pushed the French government to expand fuel assistance for low-income and heavily commuting drivers, and to extend support to the fishing, agriculture, and construction sectors. However, these measures came at a time when Paris faces a high financial deficit and large public debt, which places the government before a difficult equation between calming social anger and maintaining the path of reducing the deficit.
Economic data indicate that the rise in fuel is no longer a problem confined to filling stations, but has become part of a broader livelihood crisis. The increase in fuel prices raises transport and production costs, pressures food and service prices, and increases the burden on workers and families who depend on cars for their daily commuting.
Accordingly, the closure of the Strait of Hormuz constituted a fundamental factor in accelerating the rise in energy prices and raising the level of social tension, especially in France, where the fuel crisis overlapped with the files of wages, public services, purchasing power, and financial policies.
Popular pressures are likely to continue if fuel prices remain high, or if European governments fail to provide sufficient support to affected families and sectors, at a time when these governments are trying to avoid expanding public spending and mitigating the impact of inflation on the economy.
(Source: agencies)
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