President Emmanuel Macron said this weekend that the French government will ask the fuel industry to sell fuel at cost price in order to cushion the blow of higher oil prices on consumers.
“The prime minister will bring together all the players in the sector this week and we will ask them to sell at cost, so that nobody 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 give them compensation of up to 100 euros per car per year.
The French president further argued that a price freeze at current levels would not be as effective as sales at cost.
Reuters notes in its report that there were also ideas to force fuel distributors to sell below cost, which the industry categorically rejected. 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 marketers.
The sell-at-loss proposal was supposed to be temporary, lasting 60 days. It would have required the repeal of a 60-year-old law. It was quickly abandoned, however, when small fuel retailers railed against it, arguing that they would not be able to compete with the larger fuel marketers, even though the Minister of Finance, Bruno Le Maire, had promised help from the public coffers.
Moreover, commentators noted that if fuel retailers and supermarkets were forced to sell at a loss, they would make up for it by raising the prices of other products.
Last year, during the last oil price spike, the French government’s response to the sensitive issue of fuel prices was to heavily subsidize them. This year, Macron admitted there was no money to do so. He also said that because the government needed the money to finance the energy transition and the welfare state, it could not afford to cut fuel taxes to cushion the blow of the price spike.