France to exempt retailers from replacing diesel released from reserves

PARIS, Oct 27 (Reuters) - French fuel retailers will not have to replace diesel released from France's strategic reserves under a new government scheme after a decision by Prime Minister Sebastien Lecornu, a spokesperson for the fuel lobby Ufip said on Tuesday.

France is expected to start the release of 10 million barrels of diesel from its strategic reserves on November 1 in a bid to ease pump prices after fuel costs surged in the wake of the US-Israeli war with Iran.

Retailers are working to implement the release, which will operate under a new mechanism, the Ufip spokesperson said.

Under the new mechanism, diesel will be sold to retailers below market prices to lower costs at the pump. Previously, the government lent strategic stocks to retailers, which were repurchased about a month later.

Diesel prices have hit record highs in many markets as supply disruptions linked to the Iran conflict and the war in Ukraine fuelled inflation and raised living costs.

Lecornu's office did not immediately reply to a request for comment.

(Reporting by Forrest Crellin; Editing by Kevin Liffey)