Selling fuel at a loss, an entirely foreseeable fiasco
This page is translated from the original post "Vente de carburant à perte, un fiasco si prévisible" in French.
- 22/09/2023 18:08
Unsurprisingly, from independents to major fuel distributors, the opposition is unanimous and the absolute refusal of selling at a loss has consensus.
The idea was simple and cleverly devised to reduce drivers’ fuel bills as pump prices continue to soar. No need to tap into public funds, it was enough to allow oil companies to sell gasoline below their production cost. All of course without touching taxes, because after all, no one wants to lose in the story. And who knows, cheaper gasoline sells better, leading to even more taxes collected! But why didn’t anyone think of this before?
The fuel war will not happen
Please excuse our ironic tone, but how can such a measure possibly pass? Selling at a loss has been legally prohibited since 1963 to protect small players in the economy against emerging large groups. It’s easy to destroy a business by selling a product cheaper, even if it means losing a little money that will be recovered later. The stronger players can afford to do this, the weaker cannot.
Distributors are not fools, and a few phone calls must have been enough to coordinate a common response. From oil companies like TotalEnergies to large retailers like Intermarché or Auchan, sense prevails. Sure to reduce margins and cap fuel prices, but losing money while working goes too far.
And now?
The measure has so far only been discussed. It has not been presented to the assemblies nor voted on, but it could be shelved very quickly. If the main stakeholders reject the idea, it is clear that political opposition will be eager to fight it. Yet the government persists! Maybe hoping that a major player will attempt a big publicity stunt…
After the last Council of Ministers, government spokesperson Olivier Véran again urged distributors to “participate in the collective effort, because everyone must and can make an effort.” It’s uncertain whether emotional blackmail will be enough to prevent a breakdown. At worst, we can always try to give the stern look!
READ ALSO > Cheaper fuel on December 1st?
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