TotalEnergies Considers Lower Pump Price Cap for Some Customers

(Bloomberg) -- TotalEnergies SE is considering lowering a price cap at its French service stations for motorists who subscribe to the company’s power and gas offerings, Chief Executive Officer Patrick Pouyanne said.

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The French oil and gas major has come under political pressure for benefiting from the surge in oil and gas prices when Russia attacked Ukraine in 2022. In response, it introduced last year a €1.99 ($2.16) a liter cap at its stations that currently applies mostly in rural areas, where distribution costs are higher.

This cap “will stay” and “I’m considering, for those who are both subscribers to TotalEnergies gas and power, and who have bought gasoline, to lower the ceiling,” Pouyanne said Saturday at a conference in Aix-en-Provence in the South of France. “I can see that anger is mounting in the face of this question of energy prices.”

Purchasing power issues and rising energy costs have been political flash points as French voters return to polling stations Sunday for the run-off round of the legislative elections. Last month, TotalEnergies said it will absorb a rise in distribution costs for French households on fixed-price contracts for natural gas.

The boss of the French energy giant reiterated that the transition away from fossil fuels will have to be progressive despite the urgency in fighting climate change. That’s because cleaner energies such as sustainable aviation and synthetic fuels are often more expensive and more complex to produce, Pouyanne said.

The European Union has introduced a regulation requiring that the share of sustainable aviation fuels made available in the region’s airports should total 2% next year. That will rise to 6% by 2030, of which 1.2% should be synthetically produced using renewable electricity and carbon captured from the atmosphere.

The cost of SAFs made with animal fats or used cooking oil are 3 to 4 times more expensive than traditional jet fuel, while synthetic kerosene made with green hydrogen and biogenic carbon dioxide are 8 to 10 times costlier, he said.

Aviation is one of the toughest industries to decarbonize, and the costs, estimated to run into the trillions, are likely to be passed on to customers. While Europe has introduced mandates that increase gradually over coming decades, the US has so far relied on incentives to generate more SAF production.

“There’s an issue of level-playing field,” Pouyanne said. “Some are starting to say they will go to Istanbul to get fuel. It’s easy to go around Europe for a number of rules.”

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