Macron wants distributors to sell fuel at cost. Good luck
French President Emmanuel Macron said he will ask the country's oil sector to sell petrol and diesel at cost as the government seeks to mitigate the impact of rising prices on households without spending large sums of public money as r iported by Bloomberg .
In France, where the chains of large-scale retail trade (GDO) own networks of fuel pumps, it has been forbidden for 40 years to sell fuel at a loss, to prevent these chains from using it as an excessive promotional tool and causing small distributors to close down, leading to the desertification. Macron suspended previous plans to eliminate this ban due to resistance from small operators and the refusal of large retail chains to finance fuel.
Macron said he would keep the measure as a threat, however, when Prime Minister Elisabeth Borne meets all industry players this week to demand more transparency on margins and demand they sell at cost, not at a loss. Obviously only large-scale distribution distributors will be able to break even, the other distributors will have to make do.
Fuel prices are an explosive political issue in France, where a tax increase in 2018 sparked the yellow vest movement that has turned into months of protests over living standards. Meanwhile, growth forecasts have been cut and the government wants inflation of 2% in 2025.
Last year, the government provided blanket subsidies that came at a huge cost to public finances. Macron has refused to reinstate those discounts and also said the government cannot afford to cut taxes on diesel and petrol if it wants to continue funding the green transition and the welfare state.
However, in the budget to be presented on Wednesday, the French president announced the renewal of allowances for low-income people who need to use cars to go to work. “It's very limited, but it's much more relevant since we don't help families who don't need it,” Macron said.
The budget will also include an increase in annual spending on the green transition from 33 billion euros to 40 billion euros. Part of this sum will be allocated to converting France's two remaining coal-fired power plants to biomass by 2027, Macron said.
“We will invest massively,” the President said. “The first thing is we need to get out of coal.” The French, on the other hand, have a bigger problem: making ends meet.
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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/macron-vuole-che-i-distributori-vendano-il-carburante-a-prezzo-di-costo-buona-fortuna/ on Tue, 26 Sep 2023 07:00:13 +0000.