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French Gas Rationing Begins As Refinery Strikes Worsen After Government Calls Back Essential Workers


France said on Tuesday that it would “requisition” (i.e. force) essential workers to staff Exxon’s French oil depot, and threatened to do the same for Total’s French refineries if talks failed to progress. But workers at Total’s Donges refinery decided on Tuesday to strike beginning on Wednesday, the militant French union CGT said according to Reuters.

As OilPrice notes, French Prime Minister Elisabeth Borne said on Tuesday that the government would start the callback process for ExxonMobil’s staff at its oil depots in the country after talks between the oil company and two unions, CGT and FO, stalled. The CFDT union, however, managed on Monday to reach an agreement with Exxon.

“Today some unions, despite the deal, wants to continue the strike action and blockades, we cannot accept that,” Borne told the lower house , according to Reuters, adding that she wants “this situation to change fast,”  adding the government was prepared to take further action if needed.

“I have therefore asked the prefects, as permitted by law, to requisition the personnel needed for the functioning of the company’s depots,” she said, referring to Esso France.

“The orders are ready”, a source at the energy ministry said, adding that requisitions would only take place if the situation at the depots does not improve.

Those comments followed weekend comments by the country’s energy minister Agnes Pannier-Runacher that the government was “doing its utmost to restore the situation to normal as soon as possible.”

Meanwhile, the CGT union called the plans “violent” and suspended all ongoing negotiations with government and employers on a national level and across business sectors – and announced additional strikes at Total’s Donges refinery.

The CGT and FO unions declared strikes weeks ago at Total’s 246,900 bpd Gonfreville and 109,300 bpd Feyzin refineries, along with the Carling petrochemicals plant. The FO Now, ExxonMobil’s 219,000 bpd Donges refinery is being added to the list. The FO union had workers striking at Exxon’s 235,000 bpd Fos-Sur-Mer refinery, as well as its 270,000 bpd Port Jerome refinery, but FO called off its strike action on Monday, Argus said.

The additional striking action comes just as France prepares to order some essential workers back to the workplace.

For those who have missed our updates, here is a snapshot of the latest twists in the most serious French energy strike in years:

  • 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.
  • France is ramping up imports to cover the production shortfall. Diesel imports for the first 10 days of October were 37% higher than the whole of October last year, Vortexa senior market analyst Pamela Munger said.
  • 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 a 6.5% salary increase in 2023 and a 3,000 euro ($2,916) bonus. Those terms meant an overall wage increase of 10.7% plus 4,000 euros in bonuses from Jan. 1, 2022, to Dec. 31, 2023, the company added.
  • The deal is among the most generous offered to workers in Europe, based on recent pay deals, and may worry companies and policymakers alike that it sets a precedent.
  • CGT said it had not signed off on the deal, and its workers remained on strike. It is demanding a 10% rise.

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

Meanwhile, the strikes and unplanned maintenance at refineries run by oil majors TotalEnergies and Exxon Mobil have forced more than 60% of France’s refining capacity offline and blocked distribution from fuel depots. 31% of service stations throughout the country were grappling with supply problems on Tuesday.  As a result, even though France vowed there would be no rationing as recently as a few days ago

… on Tuesday gas rationing started in some regions including the Alpes-Maritime, Var and Vaucluse departments in the south.

TotalEnergies on Wednesday said it would offer to hold first talks with unions who don’t participate in the strikes, adding that the CGT union was “welcome” if it ends the walkout – a condition the union had firmly rejected as “blackmail” earlier this week. By contrast, formal wage talks have been ongoing for some weeks at Esso France, where management reached a deal with a majority of unions on Monday – but not the CGT.

The refineries stoppages in France are among the longest since the cost-of-living crisis intensified this year. They have caused snaking queues at French service stations and sent diesel refining margins to record highs in Europe and the United States. As a result, sights such as the following have become increasingly frequent:

Tyler Durden
Wed, 10/12/2022 – 11:05

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