By TARA PATEL
Refiners in France lost 700 million euros ($946 million) last
year as oil-processing margins shrank and the country
imported more than half the diesel it used.
Refiners earned an average of 18 euros/ton, down from 36
euros/ton the previous year, according to the Union Francaise
des Industries Petrolieres, or UFIP. The group, which
represents companies such as Total and ExxonMobil, estimates
margins of about 30 euros/ton are needed to break even.
We are in a situation that is extremely worrying,
Jean- Louis Schilansky, who is head of UFIP, said at a press
conference. The current situation is not
More refineries will have to close in Europe, he said,
without saying whether there will be shutdowns in France.
Political debate about the future of refining
in the country
intensified last year after Petroplus and Total shut plants
and LyondellBasell mothballed another to adapt to lower
demand. Total CEO Christophe de Margerie said last month that
domestic capacity should be cut further to weather the
decline in consumption.
Frances eight working refineries ran at 70% of capacity
last year, while imports of diesel from the US and the Middle
East increased and European exports of gasoline to the US
dropped, according to a UFIP presentation.
French demand for oil products fell 0.7% to 75 million tons
in 2013, UFIP said. The country, where most new cars sold run
on diesel, imported 21.7 million tons of the fuel, or 56% of
European refiners must contend with higher costs than their
US counterparts, who benefit from cheap natural gas
from shale. Energy
makes up 30% of total expenses for oil processors in the US,
compared with 60% for their European competitors, UFIP said.
capacity dropped to 74.8
million tpy in 2013, including the mothballed LyondellBasell
plant at Berre, from 98 million tons in 2009, according to
Customers in France can expect higher prices at the pump in
2015 and 2016 as fuel producers are more heavily taxed for
carbon output, the Paris-based lobby group said. Diesel
prices will rise by 8.5 euro cents per liter in 2016 compared
with this year, while gasoline will increase by 7.7 cents per
liter over the same period, UFIP data show.