* French refining loss hit 700 mln eur in 2013 - UFIP
* French refining margins down by half to 18 eur/tonne
* French oil products consumption fell to 29-year low
By Michel Rose
PARIS, Feb 5 The French refining sector lost 700
million euros ($945 million) last year, French oil lobby UFIP
said on Wednesday, as cheap U.S. fuel imports and more
competitive plants in Asia and the Middle East ate away at
European refiners' margins.
Squeezed by declining European demand, French refineries
have also seen their traditional African markets for gasoline
exports dry up as refiners in the United States take the market.
"The refining sector is now facing extremely intense
competition, especially from the United States, because energy
costs for American refineries are much lower than ours thanks to
shale gas," Jean-Louis Schilansky, the head of UFIP, said at the
oil industry group's annual presentation.
"New refineries in operation in Asia and the Middle East are
highly productive too, so we're caught in a competitive vice
between America and Asia," he said.
UFIP data showed margins at France's eight refineries,
including oil major Total's five plants, halved to 18
euros per tonne in 2013, much below the 35 euros a tonne usually
necessary for a plant to be profitable. Gross margins stood at
12 euros per tonne in January, the data showed.
The cost of energy accounts for 30 percent of U.S. refiners'
operating costs, against 60 percent for their European
counterparts, UFIP said.
Total, Europe's biggest refiner, said earlier this year it
expected to lose about 500 million euros in its French
refineries in 2013. A two-week strike at Total's five plants at
the end of last year also highlighted the industry's
The remaining refineries are owned by Petroineos
, Exxon Mobil and Lyondellbasell
Schilansky said the dire competitiveness of the refining
sector could be a sign of things to come for other sectors in
"I don't want to sound overly gloomy, but this is something
that risks to happen in other sectors than refining," he said.
"We're probably the first ones hit by the phenomenon because
we're a base material industry, but the chemical, petrochemical,
cement, steel industries, all big energy consumers in the heavy
industry may be hit exactly the same way," he added.
Some 14 plants have shut in Europe since 2007 to adjust to
the lower demand, with refining capacity cut by 24 percent in
France over the same period, 22 percent in Britain, 15 percent
in Germany and 10 percent in Italy, UFIP said.
Lower demand for oil products in Europe, as cars become more
efficient and consumers try to cut their transport bill, has
also weighed on the refining sector.
French oil products demand fell 0.7 percent to 75 million
tonnes in 2013, the tenth consecutive year of decline and the
same level as in 1984, according to UFIP.
Demand is unlikely to pick up in coming years, as a planned
carbon tax and other green levies are expected to boost fuel
prices at the pump from next year.
French drivers can expect the price of diesel, the most
widely used fuel in France, to be inflated by 0.61 euros per
litre in 2015 by the new measures compared to 2014, UFIP said.