2023-09-17 09:38:28
How will this system be applied and especially when: the executive’s announcement leaves many gray areas.
Faced with the chronic rise in fuel prices, the government is opting for an unprecedented solution: authorizing the sale of gasoline at a loss by distributors.
Remember that this mechanism simply amounts to reselling a product for less than its purchase price. If since a law of 1963 this practice is prohibited (and can result in a fine of 75,000 euros), certain exemptions exist in particular for products which “have a marked seasonal character”. In mass distribution, on the other hand, the 2018 law imposes a minimum margin of 10%.
The system must provide “tangible results for the French” believes Élisabeth Borne, the Prime Minister. But for the moment, many questions remain unanswered.
How will the device be applied?
For the moment, we know nothing about it, Élisabeth Borne did not specify the framework of this measure nor its duration, evoking a possibility offered “for a few months in order to allow” distributors to “lower prices further”.
Who will be able to apply the sale at a loss?
Here again, the mystery remains. No distributor or oil group contacted by AFP on Saturday evening wanted to react immediately to the head of government’s announcement.
In reality, only an integrated group like Totalenergies which produces, refines and distributes fuels would be able to influence all the price components. Remember that the oil company has already announced a blockage at 1.99 euros per liter.
For others, will such a measure be economically viable? Nothing is less certain.
One thing is certain, traditional stations will not be able to fight, according to one of the sector’s unions.
“Can we do it? I say no because for us fuel is our core business, it’s an incomprehensible situation (…) for the stations that we’ve been trying to protect for years, it’s the coup de grace” comments on BFMTV, Francis Pousse, president of the professional union Mobilians which represents 5,800 traditional service stations (excluding supermarkets) including 3,400 stations displaying the Totalenergies brand.
“We gas station attendants, there is no question of us selling at a loss,” he insists to AFP. “My members live on 40, 50% or even more from the sale of fuel, so if they sell at a loss, I give them three months.” In an already very tight market, he points out that the net margin of traditional stations is “1 to 2 cents” (per liter) in normal times.
When?
Motorists are waiting for a rapid drop in prices. But the measure proposed by the executive will take time to be implemented for two reasons.
As Laurent Neumann, political columnist on BFMTV, explains, “we will need an amendment to the 1963 law which prohibits selling at a loss or a new law and a new law which takes a long time to vote on, we can then imagine that this new The law does not come into force until 2024.
On RTL this Sunday, Olivier Véran, government spokesperson, specifies that a proposed law will be included in the text which provides for the anticipation of commercial negotiations between distributors and manufacturers. This law will be debated in the National Assembly “imminently” he specifies.
Furthermore, by adopting this measure, France “would contradict European rules” continues Laurent Neumann “and Élisabeth Borne does not say how we would adapt our legislation to the European level”.
Can we really count on a price drop?
Hard to say. In mass distribution, the margin on fuel is around 1 to 3% per liter. Some already sell gasoline “at cost” which then acts as a loss leader.
With selling at a loss, supermarkets will once again be able to fight in this ultra-competitive market, but to what extent?
“Everyone takes their part,” emphasizes Elisabeth Borne, assuring that “it is normal to involve large industrialists.
“We are not saying that gasoline will fall to 1.40 euros in all stations for 6 months. We are saying that there may be commercial operations that can be carried out”, explains this Sunday on RTL Olivier Véran, door – government spokesperson.
Olivier Chicheportiche Journalist BFM Business
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