French Government Ready To Intervene To Lift Refineries Blockade

The French government said on Tuesday it stood ready to intervene to end a weeks-long oil refineries strike that has left a third of the country's fuel stations running low and exacerbated a global shortage of distillates.

The walkouts and unplanned maintenance at refineries in France run by oil majors TotalEnergies and ExxonMobil have forced more than 60% of national refining capacity offline and blocked distribution from fuel depots.

"This has gone on too long," Finance Minister Bruno Le Maire told franceinfo radio, hours after Prime Minister Elisabeth Borne held a crisis meeting with ministers late on Monday.

Le Maire said the government was ready to dip once again into strategic fuel reserves and order strikers back to work.

"If the deadlock persists we will have no other option but to requisition the means necessary to get the refineries back online and fuel depots open," he added. "We're talking hours, days at the most."

The refinery strike has caused snaking queues at French service stations and impacted European markets at a time of global shortages in distillates like diesel.

Benchmark European diesel refining margins hovered near an all-time high of $77.25 a barrel struck on Monday as the industrial action severely tightened supplies.

TotalEnergies' 240,000 barrel-per-day (bpd) Gonfreville refinery is offline while deliveries of refined products are blocked at the 119,000-bpd Feyzin refinery, which is closed for unplanned maintenance but has fuel in storage, and at the Cote d'Opal and La Mede fuel depots.

Two Exxon Mobil refineries have also been out of action since late September.

Exxon Mobil's French business, Esso France, said it had reached a salary deal with unions on Monday. Even so, it would take time for supplies to be released, said Transport Minister Clement Beaune.

Esso France said the CFE-CGC and CFDT unionised workers, who represent a majority at its sites, had agreed to an offer for a 6.5% salary increase in 2023 and a 3,000 euro ($2,908) bonus. Those terms meant an overall wage increase of 10.7% plus 4,000 euros in bonuses over the period from Jan. 1, 2022, to Dec. 31, 2023, the group added.

But the hardline CGT trade union said it had not signed off on the agreement, and that its workers remained on strike. It is demanding a 10% rise in the next round of wage hikes.

TotalEnergies on Monday offered to bring forward 2023 wage negotiations but only on condition that the strikes end. The CGT denounced the offer as "blackmail".

The strikes have exacerbated discontent within trade unions towards President Emmanuel Macron, who this autumn delayed a final decision on his contested plans for pension reforms, wary of frustration over the cost-of-living crisis.