"It will be effective from the beginning of December, I hope on December 1 since the text of the law will be examined in the Assembly in early October," said Monday the Minister of Economy and Finance Bruno Le Maire on France 2, two days after the announcement of Prime Minister Elisabeth Borne.

The latter chose Le Parisien to announce Saturday that distributors could sell gasoline "at a loss" for a few months to allow them to "lower prices further", lifting an old taboo since selling at a loss has been prohibited for 60 years.

This summer, fuel prices started to rise again, approaching the symbolic threshold of two euros, in the wake of the soaring oil prices.

Saudi Arabia's production cuts, Russia's export cuts and gloomy forecasts of a shortage of oil supply in the fourth quarter... The government continues to recall the external causes of this increase that hurts the wallet of the French.

If he has ruled out a general discount at the pump, as he had done in 2022, he has been multiplying announcements and calls for "solidarity" from distributors and suppliers for weeks.

Selling at a loss, the latest of the measures announced, has been banned in France since 1963 but demanded by some major brands. However, it is criticized by service stations outside supermarkets, while experts fear limited effects over time.

Independents not happy

"With this unprecedented measure, we will have tangible results for the French, without subsidizing fuel," said Elisabeth Borne, without retaining the proposals of the opposition which demand either a rebate as a year ago, or a reduction in the taxation of gasoline.

"Our method is to engage everyone, all economic actors, in this fight against inflation," said Bruno Le Maire Monday, because "the State can not bear alone the cost of inflation, otherwise it will increase deficits."

French Minister of Economy and Finance Bruno Le Maire in Paris on September 7, 2023 © JULIEN DE ROSA / AFP/Archives

"The lifting of the ban on resale at a loss for fuel distributors will be included in the bill" on commercial negotiations between producers and distributors "presented in early October," said government spokesman Olivier Véran.

Francis Pousse, president of the professional union Mobilians representing 5,800 service stations outside supermarkets, however expressed his indignation to AFP: "My members live at 40, 50% or more from the sale of fuel, so if they sell at a loss, I give them three months."

He also said he was "sceptical" about the beneficial effect of this measure on purchasing power, because if the prices of supermarket suppliers continue to rise, the latter will not be able to "afford to lose 15 cents on each liter of gasoline".

In recent months, many distributors have been selling fuel at cost. Most had committed last week to pursue them until the end of the year when they were summoned by the Minister of Energy Transition Agnès Pannier-Runacher.

The sector generally makes petrol and diesel a premium product, taking on their distribution only low margins. In this context, the cost price only slightly lowers the price charged to the customer at the end of the chain.

The oil giant TotalEnergies, which manages a third of the service stations in France, had announced that it would extend next year the cap at 1.99 euros per liter of the price of gasoline and diesel, announced last February, in its 3,400 stations, "as long as prices remain high".

© 2023 AFP