Fuel consumption in France dropped by 30% between September 11 and 20 compared to the first 10 days of the month, according to David Amiel, the Minister of Public Accounts. This significant decline has led to a reduction in fuel tax revenues by 407 million euros since the start of the conflict, compared to the same period last year. This figure contrasts with an earlier estimate of a 10 million euro loss, announced just four days prior. Despite the drop in consumption, the price of diesel remained at a record high, averaging 2.41 euros per liter on Tuesday, with SP98 gasoline at 2.27 euros and SP95-E10 at 2.17 euros.
Higher fuel prices mean more value-added tax (VAT) is collected on each liter sold, but they also lead to lower excise duty revenues. These duties, previously known as TICPE, are fixed amounts—61 cents per liter of gasoline and 69 cents per liter of diesel. As prices climb, people tend to drive less, which reduces the volume of fuel sold and, in turn, the amount of excise duty collected. This creates a complex situation for the government, which must balance increased VAT revenue with falling excise duty income.
In response to the rising fuel prices, the French government is expected to announce additional support for citizens most affected by the cost increase by the end of the afternoon. A new assistance program will replace the current 100 euro aid for "heavy users" starting October 1. However, only half of the three million eligible citizens have taken advantage of the existing aid. The Minister of Economy, Roland Lescure, supports an "additional" aid for this group, which would be paid automatically. This move aims to address growing social concerns, particularly as the country approaches the presidential election.
The proposed aid reflects the government’s attempt to cushion the impact of high fuel prices on households. While the new program is designed to be more efficient and widely accessible, it also highlights the broader economic challenges posed by the conflict. The government is walking a fine line between managing public finances and ensuring that vulnerable citizens are not disproportionately affected by the rising cost of living.
France Sees Sharp Drop in Fuel Consumption and Tax Revenue Amid Rising Prices
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