French government set to introduce profit margin cap for fuel suppliers
It comes after diesel prices dropped by less than 10c since announcement of Middle East ceasefire
Service station operators would be limited in how much they could earn in profits from sales above a certain threshold
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A temporary limit on windfall profits for service station companies is set to be introduced in France, but fuel tax cuts and maximum price limits remain out of the question.
A draft decree unveiled on Tuesday (April 14) would, if implemented, limit the level of profit service station operators could make from fuel sales, which could in theory see lower prices at the pumps.
The measure would “smooth the impact of price fluctuations on pump prices with an individualised approach for each service station, while ensuring that windfall profits are avoided in terms of distribution margins,” said the government.
The decree must be submitted to the national consumer council and the Conseil d’Etat before it can be included in the Journal Officiel and come into force.
It lies in contrast to several European neighbours including Germany and Italy, which have limited prices at the pumps through a direct cut to fuel duties – something the French government has consistently ruled out due to budgetary constraints.
The government earnt an extra €270 million in revenue from fuel taxes in March 2026 - but warns that the long-term impact of the conflict in the Middle East has already cost billions in lost revenue from a lack of economic activity.
A wider EU proposal to limit windfall profits from energy giants is currently being considered by the European Commission, after being requested by countries including Spain, Germany, Portugal, and Austria.
Prices have dropped slightly this week to an average price of €2.31 per litre for diesel and €2.00 - €2.10 per litre for petrol - see our updating chart for diesel prices here.
How would the new measure work?
The government would not be able to set a strict cap on maximum fuel prices at service stations through the decree, but limit profit margins on fuel sales above a certain amount.
This would allow for a flexible cap that responds to fluctuations in market price of raw materials, based on the current geopolitical situation.
The decree would prevent operators from charging prices that give them greater profit margins than in the pre-war months of January - February 2026.
“The price controls apply when refined product prices exceed the highest values observed just before the crisis,” it adds, which was approximately €1.71 per litre, including taxes, for both diesel (gazole) and petrol.
Above this, an ‘automatic trigger’ would ensure that the higher prices charged at the pumps relate only to an increased cost for operators to obtain the fuel, and not increased profits on sales.
The government believes this would help drivers without jeopardising service stations, and without having to provide government funding.
Plans criticised as ‘empty gesture’ by far-left and operators
The measure has been criticised by the far-left La France Insoumise, with MP Aurélie Trouvé calling it “an empty gesture”, saying that distributors’ margins are already at zero or just one or two percent.
The party backs the introduction of a complete price cap on fuel at €1.70 per litre, a measure also supported by the CGT union, whereas the far-right Rassemblement National is demanding a reduction on VAT on all energy products – including fuel – from 20% to 5.5%.
Service station operators have said since the outbreak of the war between US/Israel and Iran that profit margins are always low on fuel sales, and they cannot be further reduced to limit costs at the pump for drivers.
The proposal is "a bureaucratic nightmare that doesn't even allow us to know where we're going," said Francis Pousse of service station operating group Mobilians, which represents nearly 6,000 stations across France.
"I seriously doubt there would be any real benefit for consumers," he added.
It was decried as "a PR stunt... a decision that will accomplish nothing," by president of the Les Mousquetaires/Intermarché group Thierry Cotillard.
"Our margins, which were three or four cents a few months ago in January and February, are much lower now," he added.
For his part, Michel-Edouard Leclerc, head of the E.Leclerc supermarket group, said a temporary end to energy certificate requirements would allow the company to drop prices by around 15c per litre.
