The French government seems to have scored an early victory in its campaign to help drivers by reducing the cost of fuel.
On Monday two French supermarket chains – Leclerc and Système U – said they would sell petrol and diesel at cost during September, taking no profit to reduce the price by two or three euro cents a litre.
That announcement came as the finance ministry prepared for talks with the oil companies and fuel distributors and after speaking to consumer groups.
Consumer advocate Edouard Barreiro of the Union Fédérale des Consommateurs Que Choisir said: “We want the market price, that is without all the extra profit that’s taken at the various production stages. For example when drilling the oil and refining it. Too much profit is being taken and that has to be reduced.”
The industry argues its fuel profits are tiny at just one euro cents per litre.
The problem for the government is that the lion’s share of the price of petrol is tax – almost 56 percent, for diesel it is 47.4 percent – and if it cuts the tax that has a knock on effect on reducing the deficit.
More than a third is the cost of crude oil, the price of which continues to be volatile and high.
Oil prices have risen nearly 30 percent since June and the European benchmark – Brent crude – has been over $116 dollars a barrel in recent days.