A helping hand for all drivers. For you rising fuel pricesPrime Minister Jean Castex announced on Saturday March 12, a “discount at the pump of 15 cents per litre”, from April 1 A temporary measure, which will apply for a period of four months and the cost of which is estimated by the government at 2 billion euros.
Both right and left, the device provokes violent political reactions. Effectiveness of the measure, share in taxes, evolution of fuel prices… Franceinfo has deciphered and verified four recent statements about prices at the pump.
The price of the full “cost 30 to 40 euros extra”, says Alexis Corbière: exaggerated
“The smallest full in a few weeks cost 30 to 40 euros extra”, La France deputy complained insoumise Alexis Corbière at the microphone of Sud Radio on Monday. below the effect of the strong global economic recovery, then of the war in Ukraine, fuel prices have risen since the beginning of the year. Between December 31, 2021 and March 11, the liter of diesel, the most commonly used fuel in France, went from 1.54 euros to 2.14 euros, an increase of 39%, according to the latest data from the Ministry of Ecological Transition. The liter of unleaded 95 E10, the most common petrol, increased by 26% in the same period, from 1.61 to 2.03 euros.
Changes in the price of refueling are of course dependent on the fuel used and the type of car. For a car with a tank of 40 liters, a full tank of diesel costs 24 euros more than at the beginning of the year, and 16.8 euros extra for a full tank of SP95 E10. For a vehicle with a tank of 60 liters, the bill increased by 36 euros for a full tank of diesel and 25.2 euros for a full tank of SP95 E10. If Alexis Corbière’s order of magnitude therefore seems exaggerated, there’s no denying that fuel bills have risen sharply in recent weeks.
On a liter of fuel this isAbout “1 euro” goes “into the state coffers”, according to Guillaume Peltier: quite a lot
On a liter of fuel, “an average of 1 euro-1.25 euro goes to the state treasury”Guillaume Peltier said in the Public Senate on Monday. A discount of “15 cents is the minimum”Eric Zemmour’s spokesman responded.
Taxes represent more than half of the final fuel price. This share includes the domestic consumption tax on energy products (TICPE) and the sales tax (VAT) of 20%, which applies to both the product excluding tax and the TICPE. The rest of the pump price is made up of the cost of crude oil, refining, and transportation and distribution costs. Currently, on a liter of diesel of 2.14 euros, there is 97 euro cents in taxes, according to data from the Ministry of Ecological Transition. As for the liter of SP95 E10, which is exchanged at 2.03 euros, including 1.01 euros in taxes. Figures close to the low range of one euro mentioned by Guillaume Peltier.
However, if VAT and TICPE make up the bulk of the rate, “It is mainly the prices excluding taxes that are rising strongly”, according to Carine Sebi, professor and coordinator of the chair Energy for society from the Grenoble School of Management. The liter of duty-free diesel has increased by 75% since December 31, 2021, compared to 52% for the SP95 E10. Unlike VAT, calculated as a percentage, the amount of the TICPE, the main fuel tax, is a fixed amount. The share of taxes in fuel prices therefore automatically decreases when the oil price rises, marked the specialized site Knowledge of energies†
After all, all these taxes don’t end exactly “in the treasury of the state”contrary to what Eric Zemmour’s spokesperson claims. Part of the TICPE is mainly redistributed to the regions and departments. In 2022, of the 33 billion euros in TICPE expected, 11.1 billion should be distributed to local authorities and 3.4 billion to other organizations (Ile-de-France Mobilités and France’s Transport Infrastructure Finance Agency), according to the financial account.
The 15 cent discount is “the most effective measure in the fastest possible time”, the government says: doubtful
“The 15 cents per liter discount on fuel is the most effective measure in the fastest time to protect millions of French people from this untenable situation”† defended Monday on Twitter the Minister of Economy, Bruno Le Maire. An argument also displayed on RTL earlier this week by the Minister for Energy Transition, Barbara Pompili. Unlike the VAT reduction, this measure, which lasts for four months (until 1 July), does not require a change in the law and can therefore be implemented more quickly, justified for its part on Saturday the Prime Minister, Jean Castex, in the columns of Parisian (article subscribers)†
But is this 15 cent discount the optimal solution to relieve the wallet of motorists? “Ideally, more targeted measures would have been needed” intended for “big roles” or the most precarious† point Patrice Geoffron, professor of economics at Paris-Dauphine and director of the Center for Geopolitics of Energy and Raw Materials (CGEMP). Government impulse, which applies to everyone, threatens “‘a windfall’ for wealthy households who benefit from the measure when they could have temporarily supported this price increase”†
The situation has “results in urgent action” and he is not “not sure if the mechanisms exist immediately to make accurate targeting”but qualifies the specialist. The government, for its part, assures that it is thinking about implementing an alternative solution, by the summer, “which will reach those who are most dependent” to the car. Moreover, this temporary solution will not make it possible to deal sustainably with the high volatility of fuel prices.
“We are trying to put out a fire, but preventive measures would have been more effective.”Patrice Geoffron, economist
Experts interviewed by franceinfo believe that France bears the cost of its “delay” in the energy transition. “We need more structuring policy; that we are investing to decarbonise transportation and get rid of this dependence on oil”argues Carine Sebi. “Adopt more sober ways of consumption and support those who can’t” is also essential to reduce the impact of price increases on the purchasing power of the French.
Reducing VAT from 20% to 5.5% would lead to “between 30 and 45 cents drop” in the price per litre, Louis Aliot assures: not true
“If we lower VAT, as proposed by Marine [Le Pen]from 20% to 5.5% we would have approximately between 30 and 45 centimes reduction per liter”† Louis Aliot said on Monday: CNews† This VAT reduction would indeed make it possible to lower the price at the pump, but to a lesser extent than what the RN Mayor of Perpignan (Pyrénées-Orientales).
On a liter of diesel of 2.14 euros there is a total of 36 cents VAT at 20%, as explained by the French Union of Petroleum Industries (Ufip). By lowering the VAT to 5.5%, the total tax amount would fall to just under 10 cents per liter. In itself, therefore, the reduction in VAT to 5.5% would make it possible to save about 26 cents per liter of diesel fuel purchased, but not between “30 and 45 cents”as assured by Louis Aliot.
Other candidates for the Elysee Palace, including socialist Anne Hidalgo, are also calling for a 5.5% tax on fuel. However, this measure has a number of limitations. On the environmental front, Patrice Geoffron says he is “skeptical” on the fact that a reduction in VAT “on oil, which is a carbon energy” could be one “good solution”† “It is all the more harmful because it is not a targeted measure either”adds the economist.
In addition to the VAT cut, Marine Le Pen wants to reconsider the increases in the TICPE, “decided by Emmanuel Macron”, as Minister of Economic Affairs (2014-2016). The TICPE has certainly increased since 2014, excluding regional increases, from 42.8 to 59.4 euro cents per liter for diesel (+16.6 cents) and from 60.7 to 66.3 euro cents per liter for unleaded 95 E10 (+5.6 cents), according to the Knowledge of Energies site. But the amount is however, frozen since 2018, in response to the “yellow vest” movement. Moreover, lowering the TICPE would not be without consequences for public finances. In 2022, the revenues from this tax allocated directly to the state budget are estimated at 18.4 billion euros, according to the financing account.