France places a minimum stockholding obligation on industry operators and requires that a significant part of this obligation be delegated to its public stockholding agency.
France fulfils its minimum stockholding requirements to both the IEA and the European Union by placing stockholding obligations on industry operators. Each of them is required to hold a volume equivalent to 27% of the stock released for inland consumption in the previous calendar year. In this way, France ensures a minimum coverage of 98.6 days of consumption.
In meeting the 27% stockholding requirement, industry operators are obliged to hold a portion of their obligation through a central stockholding agency, CPSSP/SAGESS. They may choose to delegate either 56% or 90% of their stockholding commitment to the agency. Thus, companies are directly responsible for either 44% or 10% of their strategic reserve obligation and are able to co-mingle this amount with their operational stocks.
Typically, industry participants such as hypermarket companies (which have an obligation due to the sales of vehicle motor gasoline or diesel oil, and heating oil) choose to delegate the maximum possible volume to the agency and to meet their remaining obligation by owned stocks or even through tickets. Operators, such as refiners, typically opt to hold themselves 44% of their obligation.
The stockholding requirement on industry operators covers four product categories: motor gasoline, diesel/heating oil, kerosene jet fuel and fuel oil. According to EU legislation, companies are able to substitute the product obligation with crude oil. The product mix of emergency reserves reflects domestic demand patterns and, thus, consists mainly of diesel/heating oil.
The part of oil held by CPSSP/SAGESS depends on the option chosen by the industry operators. However, there is a trend towards greater amounts being delegated to the agency as the market share of hypermarket companies grows year by year.
All storage capacity in France is owned by industry operators, and is located primarily at the refineries and close to main oil ports. Stocks held to meet the emergency reserve obligation must be stored in storage tanks approved by SAGESS. However, there is no obligation to separate these emergency reserves from commercial stocks.
In order to maintain a wide geographical distribution of emergency reserves, CPSSP/SAGESS stores gasoline and middle distillates reserves in each of the seven defence zones that include the French territory. Reserves in each zone should represent no less than 10 days of gasoline consumption and 15 days of middle distillates consumption. A maximum of 10% of company stocks can be held in other EU countries, provided that those stocks are subject to bilateral agreements. Currently, France has agreements with Belgium, Germany, Ireland, Luxembourg and Spain. An informal agreement exists with the United Kingdom.
See also Closing Oil Stock Levels in days of Net Imports
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