France will release 10 million barrels of diesel from its emergency reserves with the aim of reducing fuel prices. This announcement was made by Sebastien Lecornu, the Prime Minister of France, in a national speech. The release of this volume of diesel follows the commitment of the Group of Seven (G7) to reduce reserves.
Details of the Release and Impact on Prices
Lecornu stated in this speech: “Last Friday, President Macron held an emergency meeting of the G7, which decided to coordinate the use of strategic reserves. As part of this effort, we will make 10 million barrels of diesel available from our reserves.” He added that this decision could reduce fuel prices by 0.12 to 0.18 euros per liter.
These statements come in the wake of the International Energy Agency's (IEA) commitment to expedite the release of 400 million barrels from its reserves. This agency announced the plan in March, but 100 million barrels of this amount remain. Following increasing pressure from the United States on other countries to release reserves, the G7 announced that member countries should prioritize the supply of diesel to the market within 20 days.
State of Reserves and Diesel Consumption in France
In March, France also committed to releasing 14.6 million barrels of oil, although it did not specify whether this amount would include crude oil or petroleum products. According to estimates provided by JP Morgan, France has so far released 3 million barrels of diesel and still has about 61 million barrels in reserves.
France, along with Germany, holds one of the largest diesel reserves. Reports have indicated that the United States directly requested France to release its reserves last week and threatened to impose a ban on diesel exports if no action was taken.
Meanwhile, TotalEnergies has also committed to controlling prices for diesel and gasoline at its stations to support the government and consumers. The French government has allocated 1.4 billion euros to help mitigate the impact of rising prices on low-income consumers and key sectors such as fisheries, agriculture, and construction.
Under new measures announced in September, the government has committed to covering 70% of the cost increases for the fisheries sector. However, costly subsidies have led to increased debt in the French economy, which is currently facing a budget deficit of over 5% of GDP.
France is expected to consume an average of 750,000 barrels of diesel per day by 2025, with domestic production reaching about 400,000 barrels per day. It is projected that diesel consumption in the country will decrease by approximately 17,000 barrels per day by 2026.
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