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The French government will ask the fuel industry to sell fuels at cost in a bid to cushion the blow of higher oil prices on end consumers, President Emmanuel Macron said this weekend.
"The Prime Minister will bring together all the players in the sector this week and we will ask them to sell at cost price, that is to say that no one makes a margin," Macron told French media, as quoted by Reuters.
To limit the impact on the poorest workers who drive to work, Macron said the government would grant them compensation of up to 100 euros per car per year.
The French president went on to argue that freezing prices at current levels was not as effective as selling at cost.
Reuters notes in its report that there had also been ideas to force fuel marketers to sell below cost, which the industry rejected categorically. Be that as it may, Bloomberg notes that Macron left the option of forcing them to sell at a loss on the table while Prime Minister Elisabeth Borne discussed the other idea with fuel sellers.
The sell-at-a-loss proposal was going to be temporary, lasting for 60 days, and would require the repeal of a 60-year-old law. It was quickly abandoned, however, when small fuel retailers railed against it, arguing they would be unable to compete with bigger fuel marketers, even though Finance Minister Bruno Le Maire promised help from public coffers.
Besides, commentators noted, if fuel retailers and supermarkets were forced to sell at a loss, they would make up for that by raising the prices of other products.
Last year, during the last oil price surge, the French government tackled the sensitive issue of fuel prices by subsidizing them heavily. This year, Macron admitted there is no money for that. He also said the government could not afford the cut fuel taxes to cushion the price surge blow because it needed the money to finance the energy transition and the welfare state.
France’s latest budget involves a substantial increase in planned transition spending, from 33 billion euros, or about $35 billion, to 40 billion euros, which is equal to about $42.6 billion.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.