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French govt to waive a ban on merchants selling fuel below cost in an effort to reduce inflationary pressures

The French government is planning to temporarily lift the ban on selling fuel below cost as part of its efforts to address home inflationary pressures, according to Prime Minister Elisabeth Borne’s statement to Le Parisien newspaper.

The surge in petrol prices during the summer has complicated the government’s attempts to manage consumer inflation. Ministers have been encouraging food and fuel businesses to reduce their profit margins.

TotalEnergies has extended its year-end fuel price cap, and several supermarket chains have offered petrol at cost through special promotions. However, Borne pointed out that wholesalers are unable to further reduce prices due to a ban dating back to 1963 that prohibits selling fuel below cost. She mentioned that this ban would be lifted for “several months.”

Borne stated that this unprecedented measure would deliver tangible results for the French people without the need to subsidize fuel, emphasizing that the government has no plans to reduce fuel taxes. She highlighted the importance of reducing the public deficit and debt while suggesting that large corporations should also contribute.

Finance Minister Bruno Le Maire indicated that the government might need to address the issue of substantial profit margins in the petroleum refining industry.

Regarding food costs, Borne announced that starting in November, businesses would be required to indicate on product labels whenever they change the size of a product. This move aims to address the practice of “shrinkflation,” where products are offered in smaller quantities without a corresponding price reduction, which has faced criticism during recent price surges in the food industry.

French retail operator Carrefour has also pledged to label products engaged in such practices.

These measures reflect the French government’s multifaceted approach to managing inflationary pressures and ensuring transparency in pricing practices across various sectors, including fuel and food.

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