Categories: News

Selling fuel at a loss: good or bad solution?

The State could authorize fuel suppliers to sell at a loss, to counteract the explosion in prices at the pump. Good for the French, but too bad for the independents…

Say that the energy sector is in crisis would be an understatement. For more than a year, the explosion in the price of a barrel of oil has had repercussions on fuel prices at the pump, which have experienced record inflation. In September 2019, the last “normal” year before the Covid crisis, diesel was exchanged on average for €1.44 per liter in mainland France. Today, this figure is around €1.90 (according to INSEE)! For two years, the State and large national companies have increased aid, in an attempt to counteract these unprecedented increases. Objective: “relieve” the wallets of the French, who are bearing the brunt of several sectors in crisis.

Discount, compensation, and capping

This is how the State implemented in 2022 fuel discount. This was a systematic reduction in the price of a liter at the pump, which had sometimes reached 30 euro cents. She had evolved to 1is January 2023 in a fuel allowance, intended to relieve only the most modest households. It took the form of an annual check for €100 intended for French people who use their car daily to get to their workplace. More recently this summer, TotalEnergies announced that it would cap the price of fuel distributed in its stations at €1.99 per liter. This advantage was to end on December 31, 2023, but it is finally renewed sine die for 2024.

Soon the sale of fuel at a loss?

Today, the Government is preparing a major new measure: it wishes allow fuel suppliers to sell at a loss. Concretely, sell “at the right price”, or even cheaper compared to their cost price. A measure banned in France since 1963, outside sales periods. If this initiative can be beneficial to motorists, it would be fatal for small distributors, and in particular the independents. Already making very little margin at the moment on the price per liter sold, they could not maintain their business by selling at a loss. On the contrary, only large distributors could afford itso much so that this would create an imbalance in terms of offers… This bill will be debated in the Assembly in October, with the aim of its implementation from next December.

Read also :

Fuel: the CGT warns of a risk of shortage

Why stocking up on fuel is not a good idea

Service stations: Total makes a radical decision

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