Mistake to prioritise diesel: French PM

French prime minister Manuel Valls has said that the policy of prioritising diesel over gasoline through taxation was a mistake.

French refiners have long called for the policy to be changed, pointing to the structural bias in the industry towards gasoline production. Excess gasoline was traditionally exported to the US but that trade has declined while imports of diesel from the US have burgeoned.

In a speech in Paris, Valls said: "In France, the diesel motor has long been favoured. This was a mistake. We must gradually undo this, intelligently and pragmatically. We must continue to adjust our tax system to encourage citizens to make more ecological choices".

The French government said in October that it plans to raise its tax on diesel by 2¢/litre in the 2015 budget. He added that the government was looking at a scheme to subsidise the modification of older diesel cars.

French petroleum federation Ufip said in September that a decline in diesel car registrations and a potential increase in tariffs on diesel could help French refiners. France has recorded a decrease in diesel-powered car registrations since 2011. EU environmental regulations on air pollution now make gasoline-powered cars more cost effective for smaller vehicles, Ufip said.

There has been a long-term erosion of gasoline's share of the motor pool. Data released by Ufip showed that diesel represented 81.1pc of French road fuel consumption in September.

In August, the Belgium petroleum federation said that the Belgian government should consider lower duties on gasoline to help address Europe's structural deficit of diesel.

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