France to sell fuel at loss to curb inflation

The French government plans to allow the sale of fuel at a loss, overriding a law from 1963, as it struggles to find new ways of containing inflation without adding to vast sums of public money already spent.

Prime Minister Elisabeth Borne made the remarks in an interview with Le Parisien, adding that the law would be suspended for a limited period of a “few months”, Bloomberg informs.

She ruled out the government cutting fuel duties.

“With this unprecedented measure, we will get tangible results for French people without subsidizing fuel,” Borne said.

Fuel prices are an explosive political issue in France, where an increase in levies in 2018 sparked the Yellow Vest movement that spiralled into months of protests over living standards.

While inflation eased in recent months, prices at the pump have risen following a resurgence in the cost of oil. The finance ministry already leaned on TotalEnergies SE to cap the cost of gas and diesel earlier this month.

Last year, the government directly subsidized fuel costs for households at a huge cost to public finances. Finance Minister Bruno Le Maire said earlier in September that reintroducing such measures would be an ecological, fiscal and diplomatic “aberration.”

“Everyone has to take their share. It’s normal to make big industrial firms contribute. The state’s responsibility is also to cut its deficit and debt,” Borne said.