2023-09-17 17:18:31
Published on September 17, 2023 at 5:18 p.m.
Curbing the surge in prices at the pump without widening the budget deficit… This is the equation that the executive is trying to solve while after a lull, the rise in fuel costs has started again this fall. Diesel jumped by more than 20 cents in two months to 1.88 euros while gasoline saw its prices rise by more than 12 cents to almost 2 euros.
To resolve this puzzle, the Prime Minister is preparing a very public measure. In an interview with “Parisien”, Elisabeth Borne announces “that exceptionally on fuel and over a limited period of a few months”, the government will lift the ban on sales at a loss in place since 1963.
With this “unprecedented measure, we will have tangible results for the French, without subsidizing fuel,” explains the head of government. She emphasizes that this “will allow distributors to lower prices further”. Knowing that Bercy has already put pressure on refiners by threatening them with a renewal of the tax on their “superprofits” if they do not reduce their margins.
Do not increase the deficit
After the riots at the end of June, the executive does not want to take the risk of a new social explosion. However, elected officials are coming back from the ground that even more than food inflation, concern is growing over the energy bill, including the price of gasoline, which had provided the spark for the “Yellow Vests” movement and largely weighed down the first five-year term of Emmanuel Macron.
The government, however, refuses to reinstate a rebate because, if the measure is desired by nearly two-thirds of French people according to an Elabe survey for BFMTV published on September 6, it would be very costly for public finances. “The responsibility of the State is also to reduce its deficit and its debt,” recalls Elisabeth Borne.
The ball is in the distributors’ court
The government is therefore pretending to respond to a request from distributors. “We hear brand owners say that they do not have the right to lower their prices because they cannot sell at a loss. Well, we’re going to change these rules,” said Christophe Béchu, the Minister of Ecological Transition and Territorial Cohesion, this Sunday on France Inter, taking up an argument mentioned by Elisabeth Borne.
Contacted by “Les Echos”, large distributors like Carrefour or Intermarché, who have already announced operations to sell fuel at cost, did not wish to comment. Before going beyond these operations, they are awaiting clarification. They should come in the bill on commercial renegotiations which will be presented to the Council of Ministers on September 27 with a view to adoption in November.
On the other hand, Elisabeth Borne’s announcement made traditional players jump, who fear a price war. “We have 2,400 independent service stations that will not be able to race. If they sell at a loss, I don’t give them three months,” warns Francis Pousse, president of the Mobilians professional union. With this disappearance, it raises the threat of new white areas in rural regions.
Traditional stations demand compensation
Unlike supermarkets, fuel can represent up to 60% of its members’ margins, he recalls. Apart from the 3,400 TotalEnergies stations that the union also represents, the others are not backed by an oil group which controls the entire chain, from exploration to distribution, and can thus balance its margins. “These stations only achieve a margin of one to two cents per liter in normal times,” recalls Francis Pousse.
We are not saying that gasoline will drop to 1.40 euros at all stations for six months. It is said that there may be commercial operations
Olivier Véran Government spokesperson
“We are not saying that gasoline will drop to 1.40 euros at all stations for six months. We say that there may be commercial operations,” government spokesperson Olivier Véran put into perspective on Sunday at the RTL-Le Figaro-M6 Grand Jury. “If it is indeed a question of allowing distributors to sell gasoline at a loss for several months, I do not see that we then dictate their commercial policy to them on a day to day basis,” reacts Francis Pousse. In other words, once the blow goes off, the big brands will be able to choose the duration of the operations that they will put in place without having to be accountable to the State.
The president of Mobilians is therefore demanding financial aid and partial unemployment compensation for traditional service stations. “We must compensate for the foreseeable drop in fuel sales and their effect on ancillary sales made by motorists during their passage,” explains Francis Pousse. He has a meeting this Monday late afternoon with the Minister of Economy and Finance Bruno Le Maire.
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