Diesel price cut announced in France

The price of diesel in France will decrease by at least 12 cents per liter starting from November 1st, according to Prime Minister Sébastien Lecornu. This move is part of an "exceptional measure" involving the release of 10 million barrels of diesel from strategic reserves, aimed at helping drivers afford fuel during the winter months.

Government aims to reduce fuel costs

The current price of diesel is 2.358 euros per liter, and the government claims the measure will lead to an average decrease of 12 to 18 cents per liter for three months, from November to January. This is expected to save drivers about 10 euros per full tank of fuel.

Economic principle behind the measure

The strategy relies on the difference between the accounting value of stored diesel and its current market price. Strategic reserves are valued at around 0.28 euros per liter, compared to about 1.10 euros on the market. Selling stored diesel at its accounting value lowers the cost for distributors, which should be passed on to consumers.

Distributors commit to price cuts

Main fuel distributors, who control about 60% of the market, have pledged to pass on the reduced supply costs. Patrick Pouyanné, CEO of TotalEnergies, promised to lower the price of diesel by 8 to 12 cents per liter. The company also announced specific cuts for non-road diesel (GNR) and domestic fuel oil.

Retailers agree to reduce prices

Francis Pousse, president of the service station branch of Mobilians, said they would pass on the price decrease as soon as they receive the discounted fuel, noting their margins are fixed regardless of the price. Michel-Edouard Leclerc of the E.Leclerc group echoed this, stating they would lower prices if their costs decrease.

Monitoring to ensure compliance

To ensure the price reduction reaches consumers, the Directorate General for Competition, Consumer Affairs and Fraud Repression (DGCCRF) will monitor fuel prices and margins. Weekly reports will be published, and enforcement actions, such as limiting margins or distributing stocks based on market share, may be taken if needed.