Fuel: Can the government lock down prices in the face of a ‘gesture’ of tankers that don’t come?

Caress in the direction of the hair to hope for favor. It was this exercise that Emmanuel Macron embarked on on Tuesday morning while visiting the Rungis market. Welcoming the “spirit of responsibility of our main producers and resellers”, the President of the Republic said that he “wants” a new “gesture” from the major oil companies to achieve lower fuel prices, as “we did last year.” year” from Total. The message was already relayed and repeated by the government a few weeks ago, after a statement to this effect from the boss of Total… without success.

The issue of fuel prices comes up in February, when diesel and unleaded gasoline prices have been hovering around the €2 mark for several weeks, not exceeding it (yet). Thus, last week diesel was sold in France at an average price of 1.84 euros per liter, while unleaded petrol was sold at an average of 1.91 euros per liter.

A hike in gasoline prices, already high, could be a nightmare for the executive branch, which remembers the Yellow Vests movement, born of fuel price hikes, among other things, and so far its pension reform plan has been met with strong opposition. However, hypothetically, the question of freezing fuel prices if ever the “gesture” of big companies, including Total, is ever delayed, is therefore a possibility on the executive’s table.

The price freezes already in 1990

The price freeze debate is not new. During the presidential election, Jean-Luc Mélenchon, Éric Zemmour and Anne Hidalgo proposed such a measure when Valerie Pecresse defended a tax cut to keep the price of a gas station below €1.50. In 2012, during the election campaign, François Hollande promised to freeze prices for three months. In the end, he gave up, preferring to again make a gesture to the tankers.

However, it is possible to fix prices on the pump. In 1990, at the height of the Gulf War, Prime Minister Pierre Beregovoy froze gasoline prices for several weeks. If today the government decided to take the same measure, it could rely on the Commercial Code and its article L410-2. Emmanuel Macron and his ministers know him: he used the same tool during the Covid-19 crisis to lock down the prices of masks and hydroalcoholic gel when their prices skyrocketed.

The article in question states that, in general, prices are “freely determined by competition”. But it also states that the executive may violate this rule for a maximum of six months “against excessive price increases or decreases” in the event of a “crisis situation, exceptional circumstances, public calamity or a clearly abnormal market situation.” Sufficiently broad provisions that the government could use to protect the liter from exceeding 2 euros.