Fuel: the State opens its reserves, Total puts its price cap at 500 million, windfall profits still await an answer

The facts

Diesel remains the most visible symbol of the cost of living. Before the Senate's economic affairs committee on Tuesday 27 October, minister Maud Bregeon set out, according to Public Sénat, the release onto the market of 10 million barrels from France's strategic stocks, about 10% of those reserves. Sales will be spread from November to January. The government expects a drop of 12 to 18 cents per litre at the pump, for private motorists as well as for the off-road diesel used by farmers and the construction sector.

These barrels are sold at their acquisition price, which the minister says is nearly four times lower than the market price. According to Enerzine, the operation is France's share of a coordinated release of 100 million barrels decided by the G7 on 2 October. A decree published in the Journal officiel on 24 October requires, according to Public Sénat, that the full benefit be passed on to the end customer. The executive promises weekly monitoring and reserves the option, in case of abuse, of capping margins.

The context remains tense. Brent crude reached 115 dollars a barrel, Public Sénat reports, amid Houthi attacks on Saudi Arabia and fears of escalation between Washington and Tehran. The regulated gas price will rise by 6.6% on 1 November for six million households.

The day before, on the same outlet, Patrick Pouyanné put a figure on the cost of the cap TotalEnergies has applied since 22 July, at 1.99 euros per litre of petrol and 2.25 euros per litre of diesel. The CEO estimates the bill at around 500 million euros by the end of the year. He admits the decision is "not very rational, to be honest", but presents it as an investment in the brand's image. The group will publish its third-quarter results on Thursday 29 October. According to Economie Matin, citing company data, its European refining margin jumped 146% over the quarter, to 33.2 dollars per barrel.

The positions at stake

The government defends a line of budgetary caution. Rather than a general tax cut, it favours targeted aid, which has reached nearly 1.5 billion euros since the start of the crisis according to Maud Bregeon. The 100-euro allowance for heavy drivers, covering October to December, is now open to 5.5 million people, compared with 3 million previously. The argument deserves a hearing: with a debt that worries the rating agencies, every billion counts.

TotalEnergies, for its part, argues that a large French oil group protects consumers better than a tax. Patrick Pouyanné says the French prefer the cap to taxing the company, and had already warned in the spring, as franceinfo reported, that a windfall profits tax could call the cap into question.

The left has been calling for months for an exceptional contribution on oil and gas profits. According to NosParlementaires, the National Assembly's finance committee adopted on 8 October an amendment by Ecologist MP Eva Sas introducing a temporary 66% tax on these windfall profits, which was due to be put to a vote again in plenary. But the budgetary climate is hardly favourable to it: on Tuesday evening, LCP reports, MPs scrapped by two votes the surtax on large companies' profits, against the government's advice.

The analysis

We must acknowledge what works. Drawing on strategic stocks, in coordination with our G7 partners, is a State response, swift and well framed. TotalEnergies' cap, whatever its commercial calculations, brings real relief to motorists.

But the overall picture raises questions. On one side, the State is drawing on a national security reserve, built with public money, to contain prices. On the other, refiners are enjoying margins multiplied by two and a half in a single quarter. When a geopolitical crisis enriches some players while others pay more to heat their homes or get to work, the question of a fair contribution is not ideological, it is republican.

Voluntary capping also raises a matter of principle. It makes the protection of households depend on the goodwill of a company and its brand strategy. The CEO says so himself: every point of market share gained has a cost, and that cost is an investment. Public policy cannot rest on a revocable commercial gesture, especially when that gesture is explicitly set against taxation.

Finally, targeted aid has its blind spots. The energy voucher, Public Sénat recalls, reaches 800,000 fewer automatic beneficiaries than in 2024 according to senator Daniel Gremillet, and its value has barely changed since 2018. The poorest, who do not always own a car but must heat their homes, risk being the forgotten ones of this winter.

What now?

TotalEnergies' results on Thursday will show the exact scale of the profits drawn from the crisis. That will be the moment for the government to say clearly whether it accepts that part of these gains should fund the protection of households, through a temporary contribution targeted at exceptional margins and without penalising investment in the transition. France did so in 2022 at the European Union's prompting. Why not take that path again, linking it to an increase in the energy voucher before winter?

Article written with the help of artificial intelligence.