Will Emmanuel Macron’s announcements be followed by effects?

During his interview, the President of the Republic indicated that the executive would ask refiners to limit their margins, and distributors to sell gasoline and diesel at cost price.

End clap for there “selling at a loss” fuel. Announced with great fanfare by Prime Minister Élisabeth Borne last week, this measure only lasted a week. Guest on TF1 and France 2 on Sunday evening, the President of the Republic buried this system which aimed to limit the surge in prices at the pump. It will remain, at most, in the state of “threat“.

It must be said that the executive faced a formal outcry, after this announcement from the boss of the majority in The Parisian. Neither oil companies, nor independent stations, nor experts, nor m distribution were in favor of it. “In any case, we cannot afford to offer to sell fuel at a loss, even if we had the right to do so.», got annoyed this weekend, in our columnsFrancis Pousse, national president of service stations and new energies within the professional union Mobilians, which represents 5,800 stations, including 3,400 from TotalEnergies.

In reality, only m distribution chains like E. Leclerc, Super U, Carrefour or Intermarché had sufficient margins to sell fuel at a loss, as it was, for them, only a loss leader. But the bosses of these behemoths had also dismissed this option out of hand. “We are not going to use this possibility, because otherwise we would have to increase the price of pasta. We’re not crazy», justified the boss of the Musketeers, Thierry Cotillard, interviewed at the National embly.

Refiner margins in the crosshairs

If this avenue seems abandoned, Emmanuel Macron has nevertheless taken two new arrows from his quiver: on the one hand, putting in place a fuel allowance of one hundred euroslimited to workers» having a vehicle; and, on the other hand, act on the fuel chain, by requiring refiners to make efforts on their margins, then by asking distributors to sell at cost price. “There is one thing we can do, and that is to try. [d’éviter] that there are abusive margins being made on refining. […] The Prime Minister will bring together all the players in the sector this week, and we will ask them to do so at cost price.“, said the President of the Republic.

Concretely, upstream, on the refiners side – TotalEnergies, Esso and Petroineos -, the objective is to understand whether the margins generated are legitimate, indicates the office of the Minister of Energy Transition, Agnès Pannier-Runacher. The executive thus counts “look at the prices in detail», to better see the costs of refining, and those of distribution and transport. This should make it possible to see “whether certain players could have taken advantage of the context to increase their margins opportunistically“.

In fact, the shared data by the ministry report a rebound in refiners’ surpluses in recent months. The gross margin, in other words, the difference between the value of a barrel of Brent and the finished product, increased from 74 euros per tonne to 121 euros per tonne, between December and August. The net margin is obviously lower. The executive intends, in any case, to put pressure on these players, to ask them to compress their profits and reduce the final price.

It remains to convince these giants, some of whom are foreigners: agreeing to make an effort in France would open, for them, a Pandora’s box to do the same abroad… “As of today, they are not ready to do anything else», warns a connoisseur. There “market logic» applies: “A fuel at a price which is continental, therefore European, which results from the supply-demand balance. This balance is essential for France. France will not change anything“, declared Olivier Gantois, president of Ufip Energies and Mobility, on Franceinfothis Monday morning.

In addition, margins allow refiners to maintain their facilities and invest to modernize them. A windfall far from useless, therefore. TotalEnergies, for its part, will also be able to argue that it is already making an effort, by limiting the sales price to 1.99 euros. A standoff is therefore looming.

Inefficient fuel at cost price

At the same time, the government wants to push distributors to increase sales operations at cost price. In other words, companies would sell gasoline and diesel not while losing money, as first suggested by Elisabeth Borne, but without making any. “The president’s idea is to see how we go further, over time», Comments the office of Agnès Pannier-Runacher. A new announcement that Francis Pousse regrets. “The President of the Republic set aside the measure of selling at a loss, but then said that he was urging all players in the sector to operate at cost price. Maybe my explanations weren’t clear enough.», he sighs.

In fact, the stations make little profit from fuel, one to two cents per liter, at most. TotalEnergies aside, the distributors BP, Esso – both resold, in France, to wholesalers who buy their products at market prices – and Avia buy their products at international prices, underlines Francis Pousse. In other words, these actors “have zero room for maneuver“. In addition, unlike tobacco stores, which receive a percentage on the packet of cigarettes and therefore earn more when the price increases, stations receive a “unit margin per liter», provided for in the contracts. It does not move, even when the price increases, adds the representative.

If large and medium-sized stores can absorb these few cents of loss during targeted sales operations at cost price, it is also because they have stores to replenish. Fuel is, for them, only a loss leader. The situation of other stations – independent as well as those linked to networks – is very different. “It’s our reason for living, it’s thanks to this that we earn money», notes Francis Pousse. Professionals are therefore concerned about a distortion of competition: large retailers would periodically sell at cost price, unlike other players, and TotalEnergies, for its part, would maintain its price cap. This would lead to a wide range of prices, from which independents and smaller sellers would suffer. “Saying that everyone must sell at cost price is not for lack of explaining to them that it is not possible», annoys the representative of Mobilians, for whom he is “notno question of making an effort“.

If the executive maintains its call to sell at cost price, to which distributors would mainly respond, professionals call for maintaining the principle of a compensation fund to protect other stations. Otherwise, many sellers will close their shops. In the meantime, these actors are worried about being put with their backs against the wall by the executive, with the wrong role: refusing to make a move for the households’ wallets. “We are made to look like bad guys», concludes, sullenly, Francis Pousse.

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