In an attempt to relive consumers from the pressure of high inflation, the French Finance Minister, Bruno Le Maire instructed the country’s biggest energy and shipping companies to use part of bumper profits to help customers cope with high inflation. On one hand, the current energy price shock is eroding households’ purchasing power, on the other hand it is fuelling record profits at some firms, prompting some governments to impose a windfall tax, such as Britain has done on gas and oil producers.
France has so far eschewed that path, urging companies instead to take steps that reduce prices for customers while leaving the threat of a windfall tax on the table. “A small number of companies have during the crisis made profits in sectors such energy or transport … I want them to give me strong proposals so that they give back a part of their profits to the French people,” Le Maire announced in the media.
“This can take the form of rebate on fuel prices or proposals by transport firms like CMA-CGM. If they choose against not doing more, we will take our responsibilities,” he added.
On Monday, Le Maire called on energy giant TotalEnergies TTEF.PA, which analysts expect on average to report net income this year of nearly 29 billion euros according to Refinitiv, to extend and increase rebates at the pump.
It has already offered a 10 euro cent rebate until the end of August, in addition to an 18 cent rebate from the state, which Le Maire has offered to keep in place until the year end.
A Finance Ministry source said that Le Maire has also asked shipping giant CMA-CGA, which is privately controlled by the Saade family, to reduce the cost of transporting materials used by the construction sector and had also asked banks and insurers to help their clients cope with inflation. Another ministry source said that while a windfall tax did not sit well with the government’s commitment refrain from adding France’s already high tax burden, they were not entirely closed to the idea if firms did not take action.
