Increased Competition in the Fuel Market
TotalEnergies has gained significant attention by offering lower fuel prices at its service stations in France. The company, responsible for oil production and refining, has faced considerable criticism from its competitors due to its notable pricing. While global oil prices have risen due to geopolitical tensions, including the war between the United States and Iran, TotalEnergies has capped the price of E10 fuel at €1.99 and diesel fuel at €2.25. These prices are clearly below the national average of around €2.15 and even close to €2.50 in some regions.
Economic and Political Consequences
This action, which appears to be under political pressure to impose taxes on energy companies' unexpected profits, has cost TotalEnergies between €250 million and €300 million. However, the company has managed to double its profits to €11.2 billion in the first half of this year. French Prime Minister, Sébastien Lecornu, had requested TotalEnergies in May to set a 'generous cap' on prices. However, the company’s CEO, Patrick Pouyanné, has warned that if a tax on unexpected profits is imposed, this price cap will be abandoned.
Read more: Iraq's Prime Minister's Visit to France and Germany Focused on Economy and Security
Public anger over fuel prices is rising, and some independent gas station groups have filed a complaint with the French competition authority, strongly criticizing TotalEnergies for putting pressure on smaller competitors with its low prices. Additionally, supermarkets, which traditionally lower fuel prices to attract customers, are also dissatisfied with this situation.
As the presidential elections in France approach, the government is closely monitoring the economic situation and fuel prices. Government representative, Maud Bréjeon, has noted that about one in ten service stations in France are out of at least one type of fuel, most of which belong to TotalEnergies. The government's goal is to reduce prices as much as possible or at least prevent them from rising.
Read more: Significant Difference in Income and Housing Prices in Spain · French Economy at Risk: Growth Forecast Reduced to 0.4%
