Selling fuel at a loss: what you need to know about this measure

Fmake a gesture for the French who depend on their car, without financing fossil fuels. This was the government’s objective. Élisabeth Borne announced, in an interview given on Saturday September 17 to Parisian, wanting to authorize distributors to sell fuels at a loss “over a limited period of a few months”. The Prime Minister promises “tangible results for the French without subsidizing fuel”.
This measure will be included in the bill on commercial negotiations between supermarkets and their agro-industry suppliers. This will be examined at the beginning of October in the National Assembly. If Parliament gives the green light, “it will be effective from the beginning of December, I hope on the 1stis December”, specified the Minister of the Economy Bruno Le Maire this Monday morning on France 2.
For the executive, there is urgency. The price of diesel reaches 1.88 euros per liter, and gasoline is around 2 euros. An increase due to the geopolitical context as well as the fall of the euro against the dollar. This pressure on the wallets of the French explains why the government is reversing sixty years of legislation.

What is selling at a loss?

On its site, Fraud Repression defines selling at a loss as “the resale of a product as is below its actual purchase price”. By effective purchase price, it is necessary to understand the net unit price appearing on the purchase invoice, to which we add the turnover taxes, the specific taxes relating to this resale and the price of transport. Let us specify that in 2023, the rates of the internal tax on consumption of energy products, the TICPE, are 60.75 cents per liter for diesel (62.64 cents in Île-de-France) and 69.02 cents for SP95-E5 unleaded gasoline (70.04 centimes in Île-de-France).

Is selling at a loss prohibited?

In France, selling at a loss has been prohibited since 1963. It will remain so for products other than fuels, and for sellers other than those in mass distribution. The objective is to avoid unfair competition with weaker competitors. Winter and summer sales are exceptions, but the periods of the year during which they are authorized are very regulated.
Fraud Repression carefully examines any breach. In 2018, she sued Intermarché for having sold another type of black gold at a loss, since it was Nutella. The distributor was ordered to pay the maximum fine provided for by law for this type of offense, i.e. 375,000 euros.

What reductions in fuel prices at the pump?

Within the government, not all ministers show the same enthusiasm. Olivier Véran promises significant reductions. “We are almost talking about potentially half a euro less per liter,” explained the government spokesperson this Sunday on RTL. “We are not saying that gasoline will drop to 1.40 euros at all stations for six months. It is said that there may be commercial operations that can be conducted. »
For his part, Bruno Le Maire was more cautious by refusing to “commit to a figure [qu’il] is not certain to hold.” He only hopes to allow the French to “find, depending on what distributors can do, cheaper fuel everywhere in the country”. The government does not put all its eggs in one basket. Bercy threatens to renew the tax on refiners’ excess profits if they do not cut back on their margins.
The Asterès firm, whose studies are referenced in numerous titles in the national press, is less optimistic. “Even if distributors sold slightly at a loss, the gain would only be a few cents per liter at best,” we can read in a note published this Sunday. Sylvain Bersinger, chief economist of the firm, instead recommends “targeted aid to households most impacted by the rise in fuel prices”.

Which brands could sell at a loss?

No major retail player has yet made an announcement on this subject. However, it is reasonable to assume that they will seize this opportunity to attract more customers. “They’re going to lose money on fuel. On the other hand, these customers will stay to do their shopping,” explained François Geerolf, economist at the French Observatory of Economic Conditions, to France Info. This is a “very important commercial argument”. Distributors have thus increased sales at cost price since the start of the summer.

What chances does the bill have of being adopted?

On the right, the RN group, which has 88 deputies out of 577, is against it, according to statements by RN vice-president Sébastien Chenu Monday morning on Public Senate. The president of Reconquest! Éric Zemmour criticized, on BFMTV, a “tinkering” by the government, pleading for a reduction in taxes.
On the left, LFI coordinator Manuel Bompard denounced Sunday on France 3 “jokes” and “appetizers” put in place by the executive. He called for “getting away from the logic of incantation” and “blocking fuel prices at, roughly, 1.50 euros”.

By selling at a loss, would distributors make people unhappy?

Traditional pump attendants fear going out of business. “My members live 40 or 50%, or even more, from the sale of fuel. If they sell at a loss, I give them three months,” said Francis Pousse, president of the Mobilians professional union, which represents 5,800 service stations excluding supermarkets. Apart from the Total stations, whose parent company controls the entire product chain, from operation to distribution, these stations “only achieve a margin of one to two euro cents per liter in normal times,” assures Francis. Pousse, who will meet Bruno Le Maire this Monday.
For its part, TotalEnergies indicated that next year it would extend the cap to 1.99 euros per liter of gasoline and diesel in all of its 3,400 stations in France.

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