France uses strategic oil reserves to counter refinery blockade

PARIS (Reuters) - France has started using its strategic oil reserves for the first time since 2010 to counter union blockades of its refineries, the French oil industry federation said on Wednesday.

Unions protesting against a planned labor reform are picketing refineries around the country. Coupled with some panic buying, the disruption has led to fuel shortages in large parts of France including Paris over the past week.

France has strategic oil reserves worth several months of consumption on which it can draw in emergencies. They were last used when unions blocked refineries for several weeks in protest against pension reforms in 2010.

Experts say French strategic oil reserves do not physically rise or fall, but that operators allocate volumes blocked in strike-hit refineries to strategic reserve obligations, freeing up other volumes in accessible locations.

Union Francaise des Industries Petrolieres (UFIP) President Francis Duseux told RMC radio that the industry had been using the strategic reserves for two days. A spokeswoman confirmed that “a small quantity” had been used.

“Every day we use the equivalent of about one day of consumption. At worst, if the situation remains very tense, we can do this for three months,” Duseux said.

He added that even if all refineries were stopped, France’s pipeline system would still allow the industry to operate.

Industry experts confirmed that the reserves - set up following the 1973-74 oil crisis and stored in some 85 sites around the country - account on average for about three months of consumption, or longer during the summer months when there is no fuel consumption for heating.

They are composed of 44 percent of crude oil and 66 percent of refined products.

Reporting by Bate Felix, Geert De Clercq and Michel Rose; Editing by James Regan; and Andrew Callus