France Faces More Fuel Shortages as Unions Plan to Prolong Strikes

(Bloomberg) -- France’s fuel shortages are set to drag on as unions prolonged strikes at the country’s biggest refineries, prompting the government to threaten to requisition them.

With talks between managements and unions not going far, the labor actions have left almost a third of the gas stations in the country with supply shortfalls and serpentine lines of increasingly irate drivers.

Following unsuccessful wage talks on Monday with the management of Exxon Mobil Corp., which operates two refineries in the country, the CGT labor union that’s leading the walkouts urged the government in an open letter to mediate. Workers at the TotalEnergies SE refinery in Normandy have also decided to prolong the strike until at least Tuesday, the union said. 

As the gas shortages continued to grab headlines, the government of President Emmanuel Macron and the companies are under pressure to end the stalemate, with the Paris region and northern France hit the hardest. Prime Minister Elisabeth Borne, who convened a meeting with some ministers on Monday evening to discuss the crisis, suggested she may go as far as ordering the reopening of the refineries if negotiations go nowhere. 

Asked about the possible requisition of the refineries, Transport Minister Clement Beaune said on RMC radio Tuesday that “all options are on the table. If there is no accord in two to three days, we will take additional measures.”

Any such attempt will mean “war,” said Emmanuel Lépine, head of CGT refinery union, on France Info radio on Tuesday.

“I can guarantee you that will be war,” he said.

The crisis threatens to spiral into broader social discontent, as the French, already faced with higher prices of staples, struggle to get to work. The demand from unions for higher wages comes after oil companies made windfall gains from higher prices after Russia’s invasion of Ukraine. 

Borne said on Monday that she expected the situation to improve by the end of the week, after her government opened depots over the weekend, tapped strategic reserves, and increased imports.

Esso France, as the French unit of Exxon is called, said in a statement that it had reached an accord with two unions. That should allow the company’s refinery in Normandy to reopen, Beaune said, adding that  it should ease the situation in the Paris area.

“It will, of course, take some time,” he said.  

The situation at TotalEnergies is still blocked, Beaune said. TotalEnergies offered to move its annual salary talks forward to this month, but only if unions end their strikes, calling for “a sense of responsibility,” according to a statement Sunday. The company had already moved salary talks to November from the usual time in January, following meetings with unions. 

Meanwhile, Thierry Defresne, a representative of CGT’s European workers committee at Total, confirmed the availability of fuel was likely to improve, while noting that the government’s measures were rewarding oil companies to play for time, according to Agence France-Presse on Monday.

Strikers voted to continue the movement in Normandy, near Le Havre, at a depot near Dunkirk, at a bio-fuel plant in Bouches-du-Rhone, while 15 gas stations at Total’s unit Argedis will be closed on Tuesday, AFP cited Defresne as saying. 

On the sidelines of a trip to western France on Monday, Macron also called for oil companies and unions to be responsible, and said blocking fuel storage areas was “not a way to negotiate.”

Separately on Monday, Exxon diverted a crude tanker to its Fawley refinery in the UK, away from Le Havre in France, its original destination, because of the strike, according to data compiled by Bloomberg. 

The Spring, Texas-based company is also said to be offering West Texas Light oil in the market, a grade that’s typically processed at its refineries in Europe. Exxon declined to comment on commercial matters.

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