France's refining industry booms on 'exceptional' margins

By an OGJ Correspondent

PARIS, May 4 -- Refining margins in France nearly doubled the historical average last year leading to a "good but atypical" post-tax result of 6.7 billion francs for the country's refining/distribution sector, the president of the Union Française des Industries Pétrolières, Philippe Trépant, said Thursday.

Consumption of oil products, however, fell for the first time since 1993, by 1.8% to 88 million tonnes, a drop explained by Trépant as the result of high oil prices.

"Refining margins, which reached the exceptionally high level of 191 francs/tonne, that is nearly double the average 100 francs/tonne margin observed over the 1996-1999 period, essentially explain the industry's good 2000 results," said Trépant.

But he noted that despite the easing of taxes on oil products introduced in October, consumption of oil products had been negatively affected by a crude price that had "trebled in dollars but quadrupled in francs." Only consumption of jet fuel escaped the effect of high oil prices.

Trépant said he was unwilling to forecast an outlook for the rest of the year "because of the market's too-high volatility."

One certainly facing the industry in the coming year, he noted, was the "long and costly process" of introducing the euro into France's 16,000 service stations, and posting the new rates on 80,000 petrol pumps before January 1, 2002.

The conversion is expected to cost industry 150 million francs, a figure which does not include training the workforce and handling two currencies during the 9-month transition period.

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