With A Third Of French Gas Stations Experiencing "Supply Shortages", Energy Giant Seeks Urgent Wage Talks

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by Tyler Durden
Monday, Oct 10, 2022 - 06:45 AM

Just days after we reported that France had tapped its strategic fuel reserves to resupply a growing number of gas stations that had run dry due to a nearly two-week long strike of refinery workers, with Government spokesman Olivier Veran urging consumers not to panic-buy only to achieve the opposite results, on Sunday the French Energy ministry announced that almost a third of French petrol (that's gasoline for US readers) stations were experiencing "supply difficulties" with at least one fuel product (up from 21% on Saturday), as French energy giant TotalEnergies offered to bring forward wage talks, in response to union demands, as it sought to end the strike that has pushed French to the bring of a historic energy crisis.

"Provided the blockades will end and all labor representatives agree, the company proposes to advance to October the start of mandatory annual wage talks," it said in a statement. The talks were initially scheduled to start in mid-November.

In response, Union representatives earlier told Reuters the strikes staged by the CGT, historically one of France's more militant unions, would continue even as unions said they are willing to begin negotiations next week.

They have disrupted operations at two ExxonMobil sites as well as at two TotalEnergies sites, sending French gasoline inventories sliding. Over roughly two weeks of industrial action, France's domestic fuel output has fallen by more than 60%, straining nerves across the country, as waiting lines grow and supplies have run dry.

Car drivers queue to fill their fuel tanks at gasoline pumps at Auchan gas station in Petite-Foret, France, October 6, 2022

France’s Minister of Transport Clement Beaune said that there was no problem with supply in France on Saturday. He said shortages are a “localised phenomena, related to social movements", while urging companies and trade unions to act with "responsibility".

On Friday, as refinery strikes continued for a tenth day, the country's energy minister Agnes Pannier-Runacher said that "over 80% of the petrol stations are functioning as normal",  adding there were "significant supply tensions" in some regions, particularly along the border with Belgium where fuel currently costs more. Since then that 80% has dropped to 70%.

"The Government is doing its utmost to restore the situation to normal as soon as possible", Pannier-Runacher said in a statement on Saturday. "A solution to this conflict must be found as soon as possible", he added.

Meanwhile, long queues formed at inner-city and suburban service stations in and around the capital as early as Wednesday, with lines stretching back to the main A1 motorway heading northwards out of the city, according to a Reuters reporter.

One of those waiting in line at a petrol station near Paris was Terry Caboste, a metal worker, told Euronews. "I woke up at 4:00 a.m. to get gas and now it's going to be about 4 hours [that I have waited] if there's gas at 8 am,” he said.

Gilles Albou, a pensioner waiting in the same line, described his frustration at the situation: "I don't understand, I don't understand. It's difficult for me to understand why we end up in such situations?"

In hopes that a labor union resolution would be reached soon, France released strategic reserves and raised imports, Energy Minister Agnes Pannier-Runacher said in a statement, adding these should mean the supply situation improves on Monday.

Speaking to BFM TV, she welcomed TotalEnergie's offer and said she expected a move from ExxonMobil's Esso France unit "so that the French people are not taken hostage by this social dispute and can go to work with confidence".

Esso France, ExxonMobil's local unit, said it would hold a new round of wage talks with unions on Monday "with the aim of enabling the group's refineries to resume operations as soon as possible."

Wage talks have been underway for weeks at ExxonMobil, while the CGT at TotalEnergies said it has been trying to get the management to the negotiation table earlier than formal talks scheduled next month.

Workers at TotalEnergies are seeking a 10% pay rise starting this year after a surge in energy prices led to huge profits that allowed the company to pay out an estimated eight billion euros in dividends and an additional special dividend to investors. The company's CEO last week said "the time has come to reward" workers, but so far the company had refused to start negotiations.

A CGT representative said the union would not make any official comment on TotalEnergie's offer before internal discussions and informing workers.

The CFDT union, France's largest, which chose not to call for strikes despite demanding a similar pay rise, said in a statement it was prepared to start wage talks in October. Aurore Berge, the head of the governing Renaissance group in the lower house of parliament, said workers had a legitimate right to seek a share in exceptional profits that were made with their help, but not to hurt ordinary people.

"It is not acceptable that workers stage preemptive walkouts which will hit whom? The French people who have no other choice (but to use their car)," she told BFM TV in an interview on Sunday.