France’s Leclerc Stores to Sell Fuel at Cost, Chairman Says
E.Leclerc, the French supermarket chain, will sell gasoline and diesel at cost during September, adding to the government’s promised consumer tax rebate, said Chairman Michel-Edouard Leclerc.
“Prices will probably fall 2 or 3 cents a liter” at all of the company’s retail gas stations in France because of the measures, Leclerc said today on RTL radio. “We won’t be making any profit.”
French Finance Minister Pierre Moscovici will unveil the government’s plan tomorrow, which will reduce prices by a couple of cents a liter, the executive said. E.Leclerc has 546 gas stations in France, holding 12 percent of the retail fuel market and 7 percent of the diesel market, according to an e-mailed statement from the company.
Leclerc said he will be among the French fuel distributors meeting with Moscovici and Energy Minister Delphine Batho tomorrow on public and private measures to cut gas prices. Prime Minister Jean-Marc Ayrault said last week that in addition to a tax rebate, the government is seeking a longer-term plan to curb prices. President Francois Hollande pledged a three-month freeze during elections in May.
“It’s political signal,” Leclerc said today. “Fuel is an extremely symbolic product.”
French consumers’ purchasing power will keep dropping through the end of the year as the costs of housing and other necessities rise, he said.
‘Who Will Pay’
While the government has the power to block prices, “the question is who will pay,” Leclerc said. The government and private sector measures will mean fuel prices could fall this week, he said.
The reduction in the fuel tax rate will be “modest and temporary” while the government devises a system to regulate prices, Ayrault said last week. Moscovici said today that France will cut its budget deficit to below 3 percent of gross domestic product next year after tax increases this year.
A 1 cent-a-liter tax cut would cost the state an annual 500 million euros ($626 million), according to the Union Francaise des Industries Petrolieres, an oil industry lobby.
France’s parliament last month voted in a one-time charge on fuel inventories that will cost refiners and other holders of stock 550 million euros this year, according to the industry group.
Hollande vowed during election campaigning to ease the burden of higher energy costs on consumers by imposing a price freeze as well as developing a system of lower electricity and water prices for low-income households.
To contact the reporter on this story: Tara Patel in Paris at firstname.lastname@example.org
To contact the editor responsible for this story: Will Kennedy at email@example.com