The French government has announced an interesting measure to say the least.
The French state plans to allow retailers to sell fuel at a loss – even though French law currently prohibits it – in the hope that the move will lower pump prices for consumers, writes The Local.
French Prime Minister Élisabeth Borne announced on Saturday that French fuel retailers will soon – for a limited time – be allowed to sell petrol and diesel at a loss, in an effort to combat rising prices.
“This unprecedented measure will give us concrete results for French citizens, without subsidizing fuel,” Prime Minister Elisabeth Borne told the daily newspaper Le Parisien at the weekend.
Selling fuel at a loss could lead to savings of up to “half a euro per liter of gasoline”, according to an estimate provided on Sunday to RTL by the French government spokesman, Olivier Véran.
Currently, retailers cannot sell fuel at a loss under a 1963 law designed in part to protect small and independent retailers.
To implement this plan, the French Parliament will therefore have to vote to relax the law for a short period of time.
How much have prices gone up?
As of Monday, the average price of diesel in France was 1.95 euros per liter and the average price of gasoline was 1.96 euros per liter.
Fuel prices have started to rise again in France. After a lull over the summer, economic weekly Les Echos reported that diesel has risen by more than €0.20 in the past two months and petrol has risen by €0.12.
French ministers insisted the higher prices were due to factors in the global oil market, including production cuts in Saudi Arabia and Russia, devastating floods in Libya and forecasts of even lower supply in the fourth quarter.
So far, the French government has imposed price caps and asked groups to extend sales at cost to try to ease the pain, urging major fuel sellers to show “solidarity” with drivers.
Oil giant TotalEnergies – which runs a third of France’s gas stations – said it would keep petrol and diesel prices at €1.99 a liter until next year.
In France, rising fuel costs sparked social movements, namely the 2018-2019 “Yellow Vest” protests, which took place over plans for a new fuel tax.
