On Wednesday, September 20, the government once again called on fuel distributors to ” participate “ to the“collective effort”, after the announcement of several brands refusing to sell their gasoline at a loss, a currently prohibited practice that the executive intends to temporarily legalize to respond to the surge in prices at the pump. “Everyone must and can make an effort”, defended the government spokesperson, Olivier Véran, after the council of ministers, despite clearly expressed reluctance.
The measure plans to compensate for the losses of independent service stations, and the government has suggested that it is banking on a reduction of around 47 euro cents per liter, an estimate that quickly appeared to be very exaggerated, particularly by distributors. .
The practice of selling at a loss – banned for several decades to prevent cut prices from threatening the most fragile players in a sector – does not convince the consumer association UFC-Que Choisir either. In an interview with World, Antoine Autier, his head of the studies department, explains why, according to him, this “fake good idea” will have limited effects on purchasing power.
The government has decided to maintain its proposal to authorize the sale of fuel at a loss. If the measure is adopted and distributors ultimately decide to do so, what effects could this have on consumers’ purchasing power?
It may be a zero-sum calculation for the consumer. The government doesn’t look at what’s happening on the shelves. If distributors ultimately agree to sell fuel at a discounted price, we can anticipate that they will make up for the losses by increasing the price of other products sold, since, naturally, they are aiming for profit. Fuel is already a loss leader [stratégie marketing consistant à rendre le prix d’un produit particulièrement attractif dans le but de séduire des clients et leur vendre d’autres produits] for large areas.
On the other hand, this can allow mass distribution brands to make margins on their own products by advertising on “inflation baskets” with private label foods.
So this would not benefit any consumer?
There can be winners and losers. A single person who drives a lot and who only has a small weekly shopping basket can find what they are looking for, while a large family who does not travel much by car, but fills at least one shopping cart every week, will suffer from the price increase.
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