Inflation: Oil prices accelerate again in March

March had a sharp taste of fuel. According to INSEE, consumer prices rose by 1% month-on-month, an increase driven by energy and, more specifically, by petroleum products. When the price of a barrel fluctuates, France feels it quickly, and not just on the big macroeconomic charts: in real life, the life of reluctantly filling up and unexpectedly rising fuel bills.

Behind this figure lies a well-known mechanism: Brent crude prices, the European benchmark, are quickly reflected in pump prices, with a short lag, and the euro-dollar exchange rate acts as a magnifying glass. Taxes, however, are unaffected; the TICPE (domestic tax on petroleum products) and VAT mechanically amplify the variation in euros, meaning that even the slightest tension in the oil market has an immediate impact on consumers' wallets.

At this stage, the temptation is strong to attribute everything to energy, as if the rest of the economy were coasting along. However, one month does not constitute a trend, and economists closely monitor so-called "core" inflation—that which excludes the most volatile prices such as energy and certain foods—to gauge the underlying surge. This is often where the true temperature of services, rents, and rising costs is revealed.

At the pump, the thermometer of everyday life

What makes this episode so relatable is its concrete nature. Fuel isn't just an expense; it's a price that's prominently displayed, compared from one station to another, and fuels a collective mood. When it rises, transportation costs sometimes follow suit, truckers pass the price on, some delivery costs increase, and the feeling of a growing burden returns, even if everything doesn't rise at the same rate.

Within the institutions, the INSEE figure fuels the usual flurry of activity. The Ministry of Finance scrutinizes the impact on purchasing power and the timing of the measures, the Bank of France refines its growth and price scenarios, and the ECB keeps a close eye on the inflation trajectory at a time when every tenth counts in the interest rate discussions. In the corridors, the word "temporary" is often heard, but the energy has the unfortunate tendency to return in waves.

The question remains: is it a matter of timing, not slogans? March shook the index; April will reveal whether the shockwave dissipates or lingers. The coming days will also be marked by year-on-year comparisons, spending-by-spend category analysis, and signals from the oil markets, including OPEC+ decisions and geopolitical tensions. One thing is certain: the price of oil will continue to test our nerves—and our budgets.