France to allow filling stations to sell petrol at a loss to combat inflation

France is set to loosen a 1963 law forbidding the sale of petrol at a loss in order to help fight inflation, as prices at the pump hover around two euros a litre.

The French government wants to allow petrol stations to sell gas at a loss in order to lower the cost at the pump for users, without resorting to subsidies, as it did last year. © Philippe Lopez/AFP

Prime Minister Elisabeth Borne said the government would enable stations to sell petrol at a loss for a few months to allow them to lower their prices.

“With this unprecedented measure, we will get tangible results for French people without subsidising fuel,” she said in an interview with the Parisien newspaper published at the weekend.

Companies should be contributing to cutting the cost of petrol, she said, defending the government’s decision to deny another rebate, as it did last year.

“The state’s responsibility is also to lower its deficit and its debt,” Borne said.

Government spokesperson Olivier Veran said allowing petrol to be sold at a loss could potentially cut the price by 50 cents a litre, he told RTL radio, though he warned,“We are not saying that petrol will drop to 1.40 euros [per litre] in all stations for six months”.

Under pressure from the government, TotalEnergies, which manages 3,400 filling stations – a third of the total in France – has been offering rebates on its petrol, and has promised to keep prices below 1.99 euros a litre beyond the end of 2023.

But independent stations say it will not be possible to stay in business if they sell petrol at a loss.

“For us petrol station attendants, it is out of the question to sell at a loss,” Francis Pousse, who represents 5,800 filling stations for the Mobilians trade union, told the AFP news agency.

Filling stations already only earn one or two cent profit per litre of petrol sold, he said, warning that the move to allow others to sell at a loss will only benefit hypermarkets, which can make up the cost by getting people into their stores to buy other things.

He said his members depend on petrol sales for at up to fifty percent of their turnover.

“If they sell at a loss, I give them three months [to survive],” he said.

(with AFP)