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Cheap U.S. natural gas and competition from Asia and the Middle East have dealt a heavy blow to the European refining sector, with French refineries alone losing about EUR700 million ($945 million) last year, according to French oil lobbying group UFIP.

Competition from overseas producers has eaten away French refineries' margins, while demand for refined products in Europe has been declining. At the same time, the key African market for gasoline has also turned to U.S. imports, squeezing French refineries out of the market, Reuters reported.

UFIP stated that since 2007, when demand started to drop, 14 French facilities have been closed and total refining capacity in the country has been cut by 24 percent.

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Speaking at the group's annual presentation, UFIP head Jean-Louis Schilansky explained that U.S. products are much cheaper than those produced in Europe because of the low energy costs that U.S. refineries benefit from. Energy costs account for about 30 percent of the total operating costs in the United States, while for European refiners the cost of energy represents as much as 60% of operating costs. The highly productive plants in Asia and the Middle East have also contributed to the closing of market opportunities for French refiners, he added.

Schilansky also pointed out that it was possible that other industry sectors in Europe will go through similar developments. Competition from the United States and Asia may hit the chemical, petrochemical, cement and steel industries, he suggested.