French motorists are flocking to TotalEnergies service stations to take advantage of the country's lowest fuel prices, but the energy giant's rivals are accusing it of unfair competition, with the tacit backing of the government.
TotalEnergies, which extracts crude oil and refines it into petrol, also operates a vast network of filling stations across France. Traditionally, retail fuel sales in the country have been dominated by supermarkets selling at or near cost to attract shoppers. But as oil prices surged this spring amid the US-Iran conflict, the highly profitable company announced a cap of €1.99 per litre for E10 petrol (and €2.25 for diesel), well below the national average of around €2.15 and far less than the nearly €2.50 seen in some areas, including Paris.
The cap, applied intermittently over the past five months, has already cost the company between €250 million and €300 million. While that is a significant outlay, higher oil prices helped TotalEnergies double its first-half profit to €11.2 billion.
The measure was introduced as political pressure mounted for a windfall tax on energy companies' excess profits. Prime Minister Sébastien Lecornu urged the company in May to implement “a generous cap.” Its chief executive, Patrick Pouyanné, has made clear that the cap would be dropped if such a tax were introduced. “There's nothing forcing us” to keep it, he said recently. “If a tax is introduced, we'll draw our conclusions and TotalEnergies won't have any more price caps.”
Government walking a tightrope
With a presidential election just seven months away and France's economic outlook deteriorating, the government is treading carefully. “Today, the public authorities are quite happy a private company is doing the job, perhaps in their place,” said Jacques Goisque, head of the FF3C trade association representing a thousand independent service stations.
But there are limits to how much relief TotalEnergies can provide. The latest spike in fuel prices has prompted calls for demonstrations reminiscent of the 2018 “yellow vest” movement, which began as a protest against fuel tax increases and grew into a broader challenge to President Emmanuel Macron's economic policies. Macron on Wednesday asked the government to address concerns about fuel supplies and prices.
Government spokeswoman Maud Bregeon noted that around one in ten filling stations in France is missing at least one fuel, with the vast majority being TotalEnergies stations. She said the government would work to ensure adequate supplies and seek regulatory flexibility for refineries. The goal, she said, is “to push prices down as much as possible, or at the very least to keep their increase under control.”
Rivals cry foul
The FF3C group of independent petrol stations filed a complaint with France's competition regulator in mid-July, alleging unfair competition. “There is an upstream player with a dominant position that takes advantage of it to set very aggressive prices that are below market levels,” said Goisque. “We can't sell at a loss.”
Supermarkets, which typically use fuel as a loss leader, are equally furious. Michel-Édouard Leclerc, head of the leading chain E.Leclerc, said “refiners are lining their pockets” while retailers cannot compete. “We can't go any lower than what our prices are today,” he said. “We don't have a cent of margin in our filling stations.”
More than a dozen filling stations on the island of Corsica closed over the past weekend. In a statement, they said: “Despite the efforts of our supplier, our purchase price exceeds Total's retail price by several dozen cents.” They denounced “the state failing to regulate prices,” which “allows an integrated group that benefits from considerable upstream margins to dictate, to blackmail, leading to this distortion of competition.”
While the price cap is a financial burden for TotalEnergies, it has burnished the company's public image, which has often been tarnished by criticism over its low tax contributions in France relative to its global profits. The cap has “above all earned the company a large amount of goodwill among the French,” Pouyanné said recently.
The standoff highlights broader tensions in France over energy pricing and corporate responsibility, a debate that resonates across Europe as governments grapple with similar pressures. In a related development, Greece's fiscal credibility has surpassed France's, a sign of shifting investor confidence. Meanwhile, France and Slovakia have blocked an EU sanctions renewal, adding to the bloc's internal friction.
