Friday, September 22, 2023

Gasoline prices: are reductions of 50 cents authorized with sales at a loss? “No one can believe it, it’s nothing serious!”

The essentials The authorization for sales with fuel losses should see the light of day on December 1, 2023 for a period of six months. A measure aimed at lowering prices at the pump, but which is not necessarily unanimous.

The price of fuel, a highly flammable issue in France. For months, various measures have been emerging to relieve the wallets of the French when it comes to refueling. If the Government has no doubts about the possibility of reintroducing the discount system applied last year, Elisabeth Borne brought out a new weapon this weekend.

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Six days after the call from the Minister of the Economy encouraging the TotalEnergies group to extend its maximum price to €1.99/litre beyond December 31, the Prime Minister announced that selling at a loss (prohibited in France since 1963) in fuels were going to be authorized. “It will be effective from the beginning of December, I hope that on the 1stis December, since the text of the law (on commercial negotiations between producers and distributors, ND) will be examined in the Assembly at the beginning of October,” Bruno Le Maire also clarified on France 2.

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“We are going to kill independent distributors”

A measure that, according to the Bercy tenant, should only last six months. But in concrete terms, should we expect a significant drop in prices at the pump? “We are almost talking about potentially half a euro less per liter,” said Olivier Véran, government spokesman, on RTL this Sunday. “No one can believe it, it’s nothing serious,” says Pierre Chasseray, general delegate of the association of 40 million motorists. “With this we will only do one thing: put an end to independent distributors who only make a living from the sale of fuel.” “. The latter represent 5,800 service stations, excluding supermarkets, while in France the total number of points of sale is estimated at about 11,000.

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“This announcement of selling at a loss is related to the fact that, today, the increases in fuel prices come from the price of the barrel (+ approximately 25% over Brent in three months) and from refining margins, two factors over which the State has no control,” specifies Phlippe Charlez, expert in energy issues at the Sapiens Institute. If you want significant reductions, you have to accept that the distributor who only does that, that is, the one who does not produce, does not refine, can sell. at a loss.”

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“There will be lower prices, but I doubt it will be really significant”

In this context, the measure seems entirely aimed at large distribution, which represents about 62% of the French market. “There could be a fight over prices at Auchan, Leclerc, Carrefour and there will certainly be lower prices, but this could create disorder and I doubt it will be really significant,” adds Philippe Charlez. “You can imagine the day when a brand is going to carry out an operation at 1.50 euros per liter, it will be chaos,” says Pierre Chasseray. “At 7 in the morning there will be a line, at 9 there will be nothing left.” in the tanks with dissatisfied people.

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For these brands, gasoline is above all a key price, especially during the end-of-year holiday period. And the risk that they will pass on the price of gasoline sold at a loss to their products in stores cannot be excluded. “The small user, spontaneously, will be able to save, but the large user has no other option,” criticizes Pierre Chasseray. And we must be aware of one thing: the cost of distribution is not what weighs the most on the price of fuel. They are taxes. There is the TICPE (tax on internal consumption of energy products), which is set between 60 and 70 cents per liter. Then VAT, at 20%. So, when the price of a barrel increases, the State makes money, but Bruno Le Maire says he can’t give a discount because it costs too much, real hypocrisy!

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