Soaring petrol prices make French drivers rush to ethanol

Source: By Sybille de La Hamaide, Reuters • Posted: Sunday, October 24, 2021

Fuel price signs are seen at a TotalEnergie petrol station in Nice, France, October 13, 2021. REUTERS/Eric Gaillard/File Photo

PARIS, Oct 21 (Reuters) – Ethanol sales will hit record highs in France this year and next, supported by strong demand for high-ethanol fuel E85 as car owners seek cheaper alternatives to gasoline, producers said on Thursday.

Fuel prices have soared so much in France that ministers floated the possibility of petrol vouchers for low-income households on Monday, as President Emmanuel Macron’s government seeks to limit the damage from rising costs.

Consumption of the bioethanol, made mostly from sugar beet and grains, is expected to rise to close to 12 million hectolitres this year, above the record of 2019, after dropping about 10% in 2020 as the pandemic kept drivers at home, SNPAA Secretary General Sylvain Demoures said in a telephone interview.

And the trend was seen lasting in 2022, pushing it to yet another record, he added.

The average price for E85, containing up to 85 percent ethanol, was at 0.69 euro per litre in France on Friday last week, against 1.72 euro per litre for unleaded 98 gasoline, government data showed.

Although one needs around 25% more bioethanol for the same distance, the price advantage remains significant, which made French consumers rush to flex-fuel cars — that can run on petrol, ethanol or a mix of the two — and to flex-fuel kits that allow standard cars to run on high-ethanol fuel. Kits cost an average of 1,000 euros ($1,164), installation included.

FlexFuel Energy Development, which says it is France’s leader in the flex-fuel kit market, said the number of kits installed had risen 37% since June.

E85 fuel is only available in about one gas station out of four in France, but the network is growing fast with a rise of 32% in 2020, SNPAA said. TotalEnergies (TTEF.PA) and retailer Intermarche control half of the market.

The craze for flex-fuel would mainly be felt next year, Demoures said, forecasting growth of more than 20% in E85 consumption in 2022.

“The impact on volumes is not immediate. You need to install the kits, cars need to be built and delivered, it takes time,” he said.

($1 = 0.8590 euros)

Reporting by Sybille de La Hamaide; editing by David Evans

Our Standards: The Thomson Reuters Trust Principles.

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