France suffering fuel shortage as workers strike for more pay from profiteering Energy companies

Petrol pumps have been running dry in France as striking energy workers disrupt deliveries.

As frustration mounts among motorists, businesses and beyond, President Emmanuel Macron has called for calm. 

A strike by workers at France’s oil refineries is disrupting fuel supplies in Europe’s third-largest economy, another blow to the country as it battles a sprawling energy crisis.

Workers have gone on strike at oil refineries that handle more than half the country’s fuelmaking. Two have fully halted while a third is moving toward running at technical minimum levels. Together they account for more than half of France’s capacity to make diesel, gasoline and other fuels.

Government figures estimate that just 19% of petrol stations are affected, with particular shortages in the north. But the president of the Système U retail chain, Dominique Schelcher, told FranceInfo radio that the government figure underestimated the disruption. 

“Only the west [of France] will have fuel stocks,” he said, adding that “it was impossible to order” fuel in the north, east, and south of France for this weekend. 

As well as causing frustration for individual drivers, the shortages have thrown businesses – including delivery services, medical assistance, logistics chains and taxi companies – into chaos.  

The Strike action and unplanned maintenance has taken offline more than 60% of France’s refining capacity – or 740,000 barrels per day (bpd) – forcing the country to import more when global supply uncertainty has increased the cost.

A walkout by CGT trade union members at TotalEnergies has disrupted operations at two refineries and two storage facilities, and two Exxon Mobil (XOM.N) refineries have faced similar problems since Sept 20.

The action stems from disagreement about pay and brings the impact of Europe’s cost-of-living crisis into sharp focus. The CGT union representing the workers is pushing the oil companies to improve their pay offers, pointing to the profit the firms made from soaring energy and oil prices.

The longer the action endures, the greater the potential damage it can do to France as it grapples with the recent surge in energy costs. The nation’s nuclear reactors are set to undergo more work this winter than previously planned, and Russia has cut gas flows to Europe sharply. Both developments have led to a spike in energy prices across the continent.

The fuel crisis in France have caused huge lines to petrol stations in and around Paris…

Three out of six refineries are currently shut down in France, due to worker strikes that have cut production by 60%, equivalent to 740,000 barrels of petrol per day… pic.twitter.com/uMLdPzwng9

— Wall Street Silver (@WallStreetSilv) October 9, 2022

Energy companies’ profits up, from millions to billions

In the second trimester of 2022, TotalEnergies recorded profits of $5.7 billion compared with $2.2 million during the same period in 2021.  

CGT has called for a tax on these profits and a 10% salary increase – 7% to counter inflation and 3% “profit sharing”, demands that have been largely supported by energy workers. 

At the TotalEnergies refinery in Feyzin near Lyon, production work was continuing but deliveries had stalled.

CGT representative Pedro Afonso told AFP that “100% of dispatch workers were on strike for the 6am shift”, adding: “Normally there are 250 to 300 trucks every day and 30 to 50 rail carriages. Now nothing can get out.” 

Some 70% of ExxonMobil workers were also on strike, said CGT representative Christophe Aubert. “It’s the same workforce on shift all weekend, so nothing’s going to move and nothing is getting out.” 

The strikes were originally intended to last three days, but almost two weeks later TotalEnergies is still insisting that wage negotiations begin in mid-November, as planned, with an expected average salary increase of 3.5%.  

TotalEnergies has downplayed the impact of its worker strike, instead maintaining that supplies are under pressure due to the popularity of the company’s discount fuel prices over the past few months. 

Demand at TotalEnergies petrol stations has increased by an estimated 30 percent as customers have taken advantage of discounts offered by the company amid rising fuel costs.  

‘Don’t panic!’ 

As frustrations mount for striking energy workers and motorists, the stakes are also rising for the French government. 

“Let’s not panic,” said President Emmanuel Macron on Friday, as he called for calm on all sides. Yet even as the president appealed for an end to the strikes, he agreed that executives at Total should take into account the “legitimate salary demands” of its workers.

Their demands come amid a worsening cost-of-living crisis. In the same press conference, the president warned of difficult months ahead for gas prices, as food costs are expected to continue soaring.

Negotiations between the French government and unions, including CGT, over pension reforms are also expected to cause tension in coming months.  

Yet petrol, especially, holds a place of special significance in the French psyche. “Fuel prices are synonymous with the gilets jaunes (Yellow Vest protesters),” said Paul Smith, associate professor of French politics at the University of Nottingham.    

“The current situation troubles [the government] as a foretaste of problems to come – a potential winter of discontent.”

The Yellow Vest protest movement, sparked in the winter of 2018 by rising petrol prices, saw thousands take to the streets for weeks on end as a gesture of defiance against the authorities and President Macron.