Cheap ethanol drives French demand for gasoline engine conversion kits

PARIS (Reuters) - Sales of kits that let gasoline engines run on ethanol are surging in France, as drivers switch to using the sharply cheaper crop-based fuel at a time of soaring oil prices.

Self-styled market leader FlexFuel Energy Development says it delivered 6,400 conversion kits in the first 22 days of March, up 80% from 3,468 in February and nearly three times January's 2,166, data from the company showed.

Ethanol producers say other firms in the same market have recorded similar increases.

"People think now is the time, there really is interest in switching to ethanol," Sylvain Demoures, secretary general of French ethanol producers group SNPAA said.

Although more bioethanol is needed than standard gasoline to travel an equivalent distance, in France the price difference between the two - mainly due a lower levy on the grains and sugar beet-based fuel - more than compensates for that.

E85, an engine fuel containing up to 85% ethanol, was sold at an average 0.92 euro ($1.02) per litre in French petrol stations on March 25, against 1.97 euro/litre for unleaded SP95-E10, the most widely used gasoline, official data showed.

The conversion kits enable engines currently running on the latter to run on the former.

Retail gasoline prices have soared across the world this month, on concerns of supply disruptions following tough sanctions imposed by the West in response to Russia's invasion of Ukraine, prompting consumers to look for cheaper alternatives or cut consumption.

FlexFuel Head of Europe Development Jerome Loubert said part of the reason for the growth in demand for conversion kits in France was also increased access in some parts of the country to subsidies that cover all or most of their cost.

($1 = 0.8988 euros)

(Reporting by Forrest Crellin and Sybille de La Hamaide; editing by John Stonestreet)