French Supermarkets To Sell Fuel At Cost Price

 

The two largest supermarket chains in France have announced they will sell fuel at cost price to alleviate cost of living in the country.

The decision by Carrefour and E.Leclerc was made prior to a meeting between the French government and fuel retailers on Tuesday, and followed pressure from politicians to make the call.

The two chains said they would sell fuel at cost price seven days a week starting from Friday.

“We are announcing the largest cost-price fuel sales operation in our history,” said Carrefour in a social media post.

The president of the chain, Michel-Edouard Leclerc, described the move as an “act of solidarity with all customers frightened by the (price) increases and whose buying power is greatly hit”.

The Reuters news agency cited French government sources that indicated the Casino supermarket chain has also committed to selling fuel at cost price for at least two weekends per month from now until the end of the year.

A fourth chain, the Systeme U group, announced that it could only afford to sell fuel at cost price on some weekends, saying that maintaining the practice consistently was not financially feasible.

Dominique Schelcher, chief executive officer of Systeme U, stated that fuel margins average around two euro cents ($0.02) per liter. He noted that the company’s first at-cost fuel price promotion is slated for the first weekend of October. “It cannot be permanent,” he told BFM Television in an interview.

French Prime Minister Elisabeth Borne stated that the aim of Tuesday’s meeting with retailers was to deliver a “simple message”: to reduce prices and ensure transparency of margins.

The price of energy in France has risen in the context of oil price rises, the Russia-Ukraine conflict and inflation.

In a bid to ease consumer strain, the French government, in line with other European countries, is intensifying efforts to reduce food and transport costs, and is pressuring big business to assist.

Last month, the government reached an agreement with major food retailers and producers to cut prices on 5,000 everyday products.

At the weekend, President Emmanuel Macron had indicated that he would request the fuel industry to sell at cost price. He said that, in addition, he plans to offer grants of 100 euros to the least affluent workers who commute by car.

Macron said he planned to convene with fuel industry representatives this week to request them to forego fuel profit charges.

The government had initially proposed a plan to amend laws allowing the sale of fuel at a loss, but this faced strong opposition from distributors and was revised.   BY CAPITAL NEWS