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FUEL

French fuel retailers refuse government plan to sell at a loss

French fuel distributors say they refuse to sell at a loss, despite French government plans to allow them to do so in the hope that it would bring down prices at the pump for consumers.

Published: 18 September 2023 11:55 CEST
Updated: 20 September 2023 17:05 CEST
French fuel retailers refuse government plan to sell at a loss
Petrol nozzles at a gas station, in Toulouse, southern France. (Photo by Valentine CHAPUIS / AFP)

The heads of several large fuel distributors in France said on Wednesday that despite the government’s plans to alter existing legislation so that they can sell fuel at a loss, they would refuse to do so.

France’s prime minister, Élisabeth Borne made the initial announcement on Saturday, saying that fuel retailers would soon – for a limited time – be allowed to sell petrol/gasoline and diesel for less than purchase-price in an effort to combat against rising prices.

French government officials, like the spokesperson Olivier Véran, had estimated to RTL that selling at a loss could help consumers save “up to half a euro per litre on petrol.”

OPINION France’s desperate fuel price plan is a sign of tough budget choices ahead

But oil giant TotalEnergies, responsible for one-third (3,400) of France’s service stations, said it would not sell at a loss. Bosses at large supermarket chains Leclerc, Carrefour, Intermarché Système U, Casino and Auchan, have since said they would not sell at a loss either. 

Total’s CEO Patrick Pouyanné told French media that its current fuel cap, in place at all of its stations, of €1.99 per litre “is a ceiling. It won’t go any lower. We have already made a major effort.” 

Retailers are currently prevented from selling fuel at a loss under a 1963 law, designed in part to protect small and independent retailers.

In order to bring this plan into action, France’s parliament would need to relax the rules for a short period of time. 

How much have prices risen by?

As of Wednesday, the average price for diesel in France was €1.96 per litre, and the average price for petrol (SP 95 E10) was €1.96 per litre.

Fuel prices have begun to climb again in France. After a lull over the summer, the business weekly Les Echos reported that diesel had increased by over €0.20 in the past two months and petrol had gone up by €0.12.

French ministers have insisted that higher prices are down to global oil market factors, including Saudi and Russian production cuts, the recent devastating floods in Libya and forecasts of still lower supply in the fourth quarter.

So far the French government had pushed price limits and called on groups to prolong at-cost sales to try and ease the pain, urging major fuel sellers to show “solidarity” towards drivers.

Oil giant TotalEnergies promised to maintain its price cap past the end of 2023, “for as long as prices remain high.”

READ MORE: France’s TotalEnergies to extend fuel price cap until 2024

In France, rising fuel costs have sparked social movements, namely the ‘Yellow Vests’ protests of 2018-2019 which occurred after plans for a new fuel tax.

When could consumers expect prices to drop?

France’s finance minister, Bruno Le Maire, told French broadcaster France 2 that he hoped the measure would take effect “starting on December 1st, for a period of six months”.

“The state can’t bear the cost of inflation by itself, otherwise that will deepen the deficit,” Le Maire said on Monday.

French environment minister, Agnès Pannier-Runacher told BFMTV that “the law will be presented in the next few days to the Council of Ministers, then in October to the National Assembly, and we hope to vote on it in November.”

In terms of when prices would drop, the decision will ultimately be made by individual fuel distributers, and as of Wednesday, many said they would not take part.

Will prices drop at all stations?

If France’s parliament approves the plan, then it would depend on the individual fuel retailers to put it into action, which will depend on their own capacity and willingness to do so.

Despite their early statements, retailers could still change their minds, but Fabrice Godefroy, an expert with the French association 40 millions d’automobilistes told Europe 1 that he believes the effect would be minimal.

“When it comes to distributors who are not also producers (eg. TotalEnergies), they have very small margins on this.

“We’re talking about a margin of just one to two centimes, depending on the fuel. That would be a fairly small reduction, which would not be enough for motorists”.

What about opposition from smaller service stations?

With low-cost petrol mainly a way to bring in customers who go on to buy higher-margin items, large retailers have been calling for the right to sell at a loss — meeting opposition from smaller service stations.

“My members get 40 or 50 percent of their income from fuel sales, so if they sell at a loss, I’d give them three months” to survive, Francis Pousse, president of the Mobilians industry group representing 5,800 independent service stations, told AFP.

Large groups “can’t keep losing €0.15 on every litre of fuel,” Pousse added, saying he was “sceptical” of the measure’s effect on purchasing power.

In response to criticism from independent fuel distributors, the French government on Tuesday promised compensation for qualifying small service stations, which are not owned by large supermarket chains.

France’s law against selling at a loss got a high-profile outing in 2018, when supermarket giant Intermarche admitted that offers of up to 70 percent discounts on products including Nutella chocolate spread were not in line with the rules.

The firm was later fined €375,000 over the promotions, which triggered scenes of shoving and even fights in several of its shops over pots of the creamy hazelnut treat.

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DRIVING

EU countries to extend range of offences foreign drivers can be fined for

The EU has agreed to extend the number of driving offences for which motorists from other member states can be fined for and to make it easier for authorities to chase up the fines and make foreign drivers pay.

Published: 13 May 2024 17:28 CEST
EU countries to extend range of offences foreign drivers can be fined for

In the last voting session of this term, in April, the European Parliament passed new rules to ensure drivers who breach local traffic rules in another EU member state are found and fined.

The cross-border enforcement (CBE) directive was first adopted in 2015 after it was found that non-resident drivers were more likely to commit speeding offences. The European Commission estimated that in 2008, foreign drivers accounted for about 5 percent of road traffic in the EU but committed around 15 percent of speeding offences.

The directive partially improved the situation, but according to the Commission 40 percent of traffic violations committed in other EU countries are still unpunished “because the offender is not identified or because the fine is not enforced”.

In March 2023, the Commission therefore proposed updating existing measures.

New rules extend the type of offences that will trigger assistance from another member state and seek to improve collaboration among national authorities to identify and fine offenders.

The European Parliament and Council agreed in March on the final text of the directive, which is now being formally approved by the two institutions.

André Sobczak, Secretary-General at Eurocities, a group representing European cities in Brussels, said: “While the final outcome of the discussions is not ideal, we are pleased that EU policymakers have at least put the issue of the enforcement of local traffic rules on foreign vehicles on the table. As we approach an election year, I believe such a practical example can demonstrate why a European approach is necessary to address local issues.”

Which traffic offences are covered?

The previous directive covered eight driving misconducts that would require member states to cooperate: speeding, not wearing seat belts, failing to stop at a red traffic light, drink-driving, driving under the effect of drugs, not wearing a helmet (motorcycles / scooters), using a forbidden lane and using a mobile phone or other communication devices while driving.

The Commission proposed to add to the list not keeping a safe distance from the vehicle in front, dangerous overtaking, dangerous parking, crossing one or more solid white lines, driving the wrong way down a one way street, not respecting the rules on “emergency corridors” (a clear lane intended for priority vehicles), and using an overloaded vehicle.

The Parliament and Council agreed to these and added more offences: not giving way to emergency service vehicles, not respecting access restrictions or rules at a rail crossings, as well as hit-and-run offences.

Despite calls from European cities, the new directive does not cover offences related to foreign drivers avoiding congestion charges or low emission zones. In such cases, information about vehicle registration can only be shared among countries with bilateral agreements.

Karen Vancluysen, Secretary General at POLIS, a network of cities and regions working on urban transport, called on the next European Commission to take other local traffic offences, such as breaches of low emission zones, “fully at heart”.

Collaboration among national authorities

For the traffic violations covered by the directive, EU countries have to help each other to find the liable driver. The new directive further clarifies how.

Member states will have to use the European vehicle and driving licence information system (Eucaris) to get the data of the offender.

National authorities will have 11 months from the date of the violation to issue the fine to a vehicle from another EU member state. However, they will not have to resort to agencies or private entities to collect the fine. This was requested by the European Parliament to avoid scams or leaks of personal data.

Authorities in the country of the offender will have to reply to requests from another EU member state within two months.

When the amount of the fine is more than €70, and all options to have it paid have been exhausted, the member state where the violation occurred can ask the country of the offender to take over the collection.

The person concerned will be able to request follow-up documents in a different official EU language.

When will the new rules will be enforced?

Now that the EU Parliament has passed the law, the EU Council has to do the same, although there is no date set for when that will happen. Once the directive is adopted, EU countries will have 30 months to prepare for implementation.

Last year the Commission also proposed a new directive on driving licenses, but negotiations on the final text of this file will only take place after the European elections.

This article has been produced in collaboration with Europe Street news.

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