Documents and Analysis

Refinery Strike

October 11, 2022

On Wednesday October 5, Olivier Véran declared that there was "no shortage" of fuel in service stations but that "tensions" existed in the supply of some of them. they. Currently, nearly a third of French service stations are experiencing supply difficulties and three refineries remain completely shut down. Has the government lacked anticipation on the subject?

There is no shortage of fuel on French territory quite simply because in France, as in other European countries, oil operators must maintain so-called strategic stocks which correspond to three months of consumption.

Physically, these stocks are located on around a hundred sites in France, including the 8 refineries, depots distributed throughout the territory and underground salt cavities in the Manosque region.

In addition, operators (oil companies) to compensate for the stoppage of production in refineries are importing. Many French ports have large storage capacities

But part of the sites is blocked by the strike. It is therefore difficult for some distributors to obtain supplies.

Such a situation, which we have already experienced in the past, is difficult to anticipate. The employees of Total Energies and Exxon Mobil claim their share of the very significant profits made by the two companies since the beginning of the year

However, the difficulties encountered by many users, unable to obtain supplies, is very problematic and the role of the government is to resolve these difficulties.

To what extent does the current situation around Total Energies highlight the shortcomings of the State? At what point does the government find itself confronted with its contradictions?

The decision by Total Energies to proceed with an additional rebate of 20 centimes per liter of fuel from 1 September, a rebate on top of the 30 centime government rebate has disrupted the distribution of petroleum products in France. Motorists rushed to Total stations at the risk of drying up these stations while neighboring stations that charged higher prices lost their customers.

The refusal of the government and in particular of the Minister of Finance to tax the superprofits of the companies which had benefited from the crisis (oil companies but also gas companies, transport companies) whereas What other European countries have done is quite surprising. Even the US government in the 1980s was taxing “windfall profits” due to the huge increase in the price of crude.

But the main problem remains the impossibility for certain essential professions (ambulances, patient transport, school transport, small businesses) to obtain supplies, putting these sectors in great difficulty.

The very cautious, even timorous behavior of the government, which constantly announces that everything will work out when the difficulties are real, is astonishing.

To what extent have we placed ourselves in an explosive situation on the subject of fuels? What can the state do?

The current situation is undoubtedly temporary. The strike, apparently over at ExxonMobil should find a solution at TotalEnergies. But the return to normal may take a little time because the restart of some refineries will not be instantaneous.

The concern for the coming weeks is probably more price than availability. OPEC's decision on October 5 to cut production in the coming weeks could push up the price level