The story so far: Commuters in France have experienced chronic gas shortages for about three weeks now as thousands of protestors, including workers at fuel refineries and depots, have taken to the streets demanding a wage increase. increasing wages. France24, a news outlet headquartered in Paris, reported that fuel distribution across the country, particularly in northern and central France and the Paris region has been disrupted.
As per Prime Minister Élisabeth Borne, less than a quarter of petrol stations nationwide are experiencing shortages, down from 30% previously. Even after the protests end, a return to normal supply conditions at petrol stations would take at least two weeks, the government has warned. Although the strike caused fewer transport disruptions than feared, participating unions have vowed further action against French President Emmanuel Macron in the coming weeks.
With the government and unions in a deadlock over stoppages at oil depots, these protests have been called the “union’s biggest challenge to Macron since he won a new presidential term in May” by France24. It also has been argued that opponents of President Macron are hoping to build on the momentum created by the refinery standoff which began at the end of September.
What is the strike about?
The protesters demand an increase in wages consistent with the rising costs of living in France. Consumer price inflation in France touched 6.8% in July this year. Workers are demanding an overall 10% increase in wages; this would entail 7% to cushion the inflationary impact and 3% for “wealth-sharing”. The latter is in reference to windfall profits (or a sudden increase in profits owing to external factors, in this case, the demand-supply mismatch owing to geopolitical tensions between Russia and Ukraine) made by corporations. In fact, the French Government recently cleared an amendment that sought to raise the taxation on dividend pay-outs by these large companies.
It must be noted that the general strike is a culmination of varied strikes with similar demands, including those of railway workers and civil servants who joined the national strike.
Other than these, the protests also address concerns regarding President Macron’s pre-election proposal to raise the retirement age from 62 to 65. As per the French news website The Local, with deficits and public debt at historic highs, the move endeavoured to pave the way for the state to raise more revenues without increasing taxes.
As reported by the AFP, Esso-Exxon Mobil announced on Friday that it had reached a pay deal with two of the largest unions, CFDT and CFE-CGC. They agreed to a 7% pay rise and a financial bonus. This raised the hopes for an end to the standoff. However, the hard-line CGT Union rejected the deal. Four out of seven refineries in the country, all belonging to Paris-based energy company TotalEnergies, remained blocked as of Sunday. These include TotalEnergies’ Feyzin, Gonfreville and Donges refineries as well as the company’s La Mede biorefinery.
The French Government also exercised its emergency powers in a bid to obligate workers to return. This was again rejected by the CGT. However, it did bring back memories of former French right-wing President Nicholas Sarkozy, who had taken a similar step against fuel workers in 2010.
How bad is the inflation in France?
Notwithstanding the domestic rise in prices, France is better placed than its peers in the Euro area. France’s annual inflation rate, that is, the overall inflation in a particular month against the comparable period last year stood at 6.2% in September whilst that of Spain stood at 9.3%, Italy at 9.5%, Portugal at 9.8%, Germany at 10.9% and Belgium 12%, based on figures from Eurostat, the EU’s statistical office.
Moreover, ratings agency Fitch expects inflation in the country to slow down in the second half of the year, reaching 4.2% by the year-end. However, it stated that the projection is sensitive to energy price developments.
Higher fuel prices have also translated into an increase in the prices of foodstuffs.
In fact, France’s central bank, Banque de France pointed out that supply difficulties continued to ease in September, although they still remained high. Specifically, in its update on business conditions in the country as of October 2022, it pointed out that 29% of manufacturing industry leaders mentioned raising their selling prices in September. In the agri-food industry, this went up to 43% of firms. The proportion was also high in the chemicals, wood, paper and printing sectors.
“The balance of opinion on developments in finished goods prices over the previous month started to rise again in industry after declining for four consecutive months, reflecting increases in raw material and gas/electricity prices,” it noted. For perspective, balance of opinion is the difference between the proportion of respondents expressing a positive opinion to that of those expressing a negative opinion.
In September, the French government decided to cap power and gas price increases for households at 15% starting next year to shield consumers.
What has been the impact of the strike?
The strike has affected several arenas that rely on mobility or power directly or indirectly, including school and transport. Eurostar had to cancel some of its trains earlier this week between Paris and London owing to the strikes.
Other than this, Reuters learnt from officials that strikes have affected almost a third of France’s nuclear reactors. This comes at a time when the country’s output is expected to hit a three-decade low owing to a record number of outages due to corrosion issues and planned maintenance. This is accompanied by the fact that the entire continent in fact is experiencing an energy crisis owing to the geopolitical conflict in Eastern Europe. National operator RTE has also warned about “heavy consequences” for the country’s electricity supply in the coming winter should there be a prolonged strike and delayed restart of some reactors.
According to S&P Global analysts in Europe, “(refinery) outages remain at peak levels due to fall turnaround seasons and effects of the labour strike in France.”
They add the combined impact of France spurring imports of gasoline and diesel in order to cover domestic demand, at a time of refinery turnarounds in Europe, has boosted product prices and cracks.
How is the movement being perceived?
According to a survey by French consultancy and research firm Elabe Group,, one in three French citizens were ready to participate in the protests. At the time of writing, however, it was learnt that workers at TotalEnergies’ biorefinery and a fuel depot had ended their strikes, with the movement running out of steam.
The research firm also concluded separately that the ongoing mobilisation was weakly supported in comparison to other similar mobilisations in recent years. 71% of people interviewed opined that the workers had obtained a sufficient increase and should stop the mobilisation, with 28% opining that the mobilisation must continue.
A similar disparity was also witnessed with requisitioning employees back to work, with about 60% of the interviewed French citizens supporting the requisition orders in light of the current shortage of fuel.
Overall, as per the survey, 49% of French people disapproved of the mobilisation initiated by certain unions. Conversely, 39% approved it with the rest being indifferent. The disapproval was higher among President Macron’s voters, while Marine Le Pen’s voters staked a majority. Conversely, approval ratings were higher among voters of the left-leaning Jean-Luc Melenchon.
