2023-09-18 04:00:00
Will fuels be sold at a loss soon in France?
Soaring fuel prices have pushed the government to act. Prime Minister Élisabeth Borne announced on September 16, 2023 that distributors might sell fuel “at a loss” for a few months. A temporary solution, of course. But it represents a major upheaval: reselling at a loss has been prohibited in France since 1963.
However, some exceptions exist for certain products or at certain periods. Selling at a loss is therefore not a new thing. But such a move across the entire gasoline and diesel market is likely to create some problems.
What is selling at a loss?
Selling at a loss means selling a product at a price lower than its purchase cost. Usually, this practice is reserved for a few exceptions, such as end of seasons or perishable products. With this new measure, distributors will be able to sell fuel cheaper than its purchase price, an unprecedented initiative.
According to Agnès Pannier-Runacher, Minister of Energy Transition, a law might be passed as early as November 2023. “ The law will be presented in the coming days to the Council of Ministers, then in October to the National Assembly and we hope for a vote on this law in November. This will allow manufacturers to use this additional leverage to lower fuel prices. “, she said on BFMTV.
Fuel prices falling sharply in France?
According to Olivier Véran, government spokesperson, this measure might lead to a reduction of almost half a euro per liter. However, not all distributors will be able to match these prices. Big box stores might use fuel as a “loss leader,” luring customers with low prices at the pump and hoping they shop there.
« We are not saying that gasoline will drop to €1.40 at all stations for 6 months. It is said that there may be commercial operations “, affirmed the government spokesperson on RTL on September 17, 2023.
????????️ #fuel : “We are not saying that gasoline will drop to €1.40 in all stations for 6 months. We are saying that there may be commercial operations,” explains Olivier Véran (@olivierveran) In #LeGrandJury. @m6info @ParisPremiere pic.twitter.com/AdtbCpnn9u
— RTL France (@RTLFrance) September 17, 2023
The concerns of independent distributors
Francis Pousse, national president of the “Fuel distributors” branch of the Mobilians union, expresses serious concerns. In an interview given to Figarohe is worried : ” In any case, we cannot afford to offer to sell fuel at a loss, even if we had the right to do so. Only large and medium-sized stores can do this… It is therefore a completely unfair measure! »
According to him, there is a real risk of market deregulation. Only TotalEnergies, present across the entire gasoline and diesel production chain, from oil extraction to fuel refining, might actually afford to sell at a loss. « The networks that I represent, excluding TotalEnergies, will absolutely not be able to match these prices. In France, Esso and BP have been bought by large distributors, and, like Avia, they all buy their fuel at market prices. However, international markets are not going to sell at a loss. »
Fuel shortages for cross-border workers?
Another problem, already known: cross-border workers risk no longer finding fuel at their stations. Whether in the south, with Italy and Spain, or in the north, with Belgium or Germany, the operation of lowering fuel prices by selling at a loss risks attracting foreign motorists. Exactly like the French cross the border when fuel is cheaper.
Result: there is a risk of shortages in certain border areas. The influx of European motorists, attracted by the potential low prices, might lead to supply difficulties for the stations. A situation well known to motorists and service station owners.
1695017710
#selling #loss #authorized
