TotalEnergies to cut fuel prices in France

TotalEnergies has agreed to cut fuel prices in France in the face of mounting government pressure to help consumers deal with the soaring cost of goods.

The French oil major, which is set to report bumper half-year profits next week, said it would reduce the price of fuel at its French forecourts by €0.20 a litre in September and October then by €0.10 a litre in November and December.

The announcement follows prolonged negotiations with the French government amid growing calls from opposition parties for a windfall tax on energy company profits.

“We prefer to make an immediate and direct contribution for our customers, rather than an indirect tax that would penalise our refineries,” said Total chief executive Patrick Pouyanné.

Unlike the UK and Italy, France is yet to impose additional levies on oil and gas companies profiting from sky-high commodity prices. The country is focusing on other avenues, although it has not completely ruled out such a move.

“I prefer money to go into the pockets of consumers than the pockets of the state and I prefer this gesture from Total to another tax in a country already full of taxes,” France’s finance minister Bruno Le Maire told BFM TV on Friday. Le Maire did not rule out increasing and extending the government’s own state-funded €0.18 per litre cut to petrol prices.

French president Emmanuel Macron has promised more measures to shield households from inflation and rising energy prices since his re-election in April, including a bill that the government is trying to pass through parliament.

Total, which sells about 10bn litres of fuel a year in France, declined to say how much the move would cost in lost earnings. It possible that it may attract more customers by offering the discount.

The fuel company had already announced targeted cuts to prices at some of its fuel stations, starting with those in rural areas. The latest action is far broader and could increase pressure on other fuel retailers to make similar reductions in France and elsewhere in Europe.

In the UK, two leading motoring organisations have accused British supermarkets, which account for almost half of all petrol and diesel sales by volume, of failing to pass on a recent drop in wholesale oil prices to consumers. The cost of Brent crude has dropped by around 11 per cent since early June, while refining margins — another key component of wholesale prices — have cooled.

RAC, the roadside assistance company, said on Thursday that it expected petrol to be sold at £1.71 a litre based on historical retail margins and current wholesale prices. However, the average fuel price at four of the biggest UK supermarket retailers is £1.86 a litre.

In March, Spanish oil company Repsol cut prices at its 3,300 service stations across Spain by €0.10 a litre.