French supermarkets have been vocal about their inability to lower petrol prices due to legal constraints. In response, the government has taken an unusual step. On September 16, Prime

Minister Elisabeth Borne announced that supermarkets would be allowed to sell petrol at a loss, albeit exceptionally.

This move comes after several other measures were implemented to counter soaring oil prices. These measures included petrol vouchers, government-subsidized discounts at petrol stations, and instructions to TotalEnergies to cap the price per liter below €2 until the end of the year. While these actions aim to ease the burden on consumers, they raise concerns about the government's ability to balance the demands of the French people for greater purchasing power with the urgent need to address the climate crisis.

The decision to lift the ban on selling at a loss reverses a law passed in 1963. The original intention of this legislation was to protect vulnerable retailers from unfair competition by larger, financially stronger competitors. By temporarily reversing this requirement, the government sends a questionable signal to a sector that has long been accused of harming small businesses. This sector has also faced criticism for abusing its buying power and occasionally engaging in questionable marketing practices. In 2018, a French food retailer faced legal action for selling Nutella spread at a loss, resulting in chaos and fights in stores. There is a concern that similar scenes may unfold at petrol stations if certain brands engage in poorly managed marketing stunts.

Another potential consequence of this decision is the temptation for retailers to compensate for their losses on petrol by raising prices on other products. If this leads to sustained food inflation, it could undermine the benefits that consumers hoped to gain from the government's actions. Additionally, this shift back to a more competitive environment could prove detrimental to many independent petrol station operators, who may struggle to keep up with the changes.

The government's approach appears to be an improvised response to a situation largely dependent on the cooperation of oil-exporting countries to increase production. However, this approach risks conflicting with the government's communication on the imperative need to adapt to climate change by reducing fuel consumption. While addressing the challenges faced by less affluent individuals in commuting is essential, the government's chosen measure may indiscriminately benefit everyone, potentially contradicting efforts to combat global warming.

As the government grapples with these challenges, it must also contend with the memory of the Yellow Vest movement and navigate through contradictory demands and public sentiment. The political opposition lacks a clear sense of responsibility, and French citizens themselves often express conflicting views. While many complain about petrol prices, they may resist new speed limit measures that could help them save money on fuel. These complexities underscore the difficulties faced by the government in addressing this multifaceted issue. Photo by Lake Lou from Lowell, US, Wikimedia commons.