French fuel prices to be reduced by 15 euro cents per litre in April

A “15 cents per litre discount” will be introduced at French petrol stations in a bid to tackle the sharp rise in the price of fuel.

The discount, which will apply from April 1 and for a four-month period, was announced by Prime Minister Jean Castex on Saturday (March 12), during an interview with Le Parisien.

The measure will concern individuals and businesses and will “be redeemable on all fuels” apart from E85 and heating oil, Mr Castex said. It is estimated that it will cost the state €2billion.

“An average price of €2 per litre – for diesel and petrol – has been exceeded across the country and that is likely to last,” the prime minister added.

However, with this discount, “each time you fill up 60 litres, you will save €9.”

The idea is to help people who drive a lot more, as the more a motorist fills up, the more money they will save. “The idea is to work on a mechanism for those who cannot do without their vehicle, with something very targeted,” Mr Castex said.

How will the measure work?

When this government measure comes into effect, the real price of petrol or diesel will still be displayed at the pump, but the discount will be applied when the customer goes to pay.

“All the technical decisions,” have not yet been finalised, but the government aims to make the calculation of the discount automatic.

Petrol suppliers will then be reimbursed by the state. Mr Castex also called for service stations to supplement governmental support with their own discounts, saying: “How can French people come to terms with the fact that they are paying €2 a litre on diesel when at the same time fuel companies are still making huge profits?

“If the State provides 15 centimes in a litre, and [suppliers] add another five centimes for example, that will be 20 centimes back in French people’s pockets.”

Why will the discount only be applicable from April?

Mr Castex said that this latest inflation-combatting measure could only come into effect in April because petrol stations needed time to prepare.

If fuel prices fall during this period, the government will consider cancelling the discount before its planned end on July 31.

However, the prime minister judged this eventuality to be “unlikely”.

Why has the government not cut fuel taxes?

Driver consumer group 40 millions d’automobilistes has commented that this government measure is “normal” as “the State is reaping more VAT than it expected.”

The Association des maires ruraux de France reacted in a similar way, calling for VAT to be cut to 5.5% from 20% to help keep prices down.

However, Mr Castex has said that this action has been ruled out as it would require a law to be passed, delaying the eventual impact on prices.

“To reduce tax on a polluting form of energy would send a bad message,” he added. “If you cut taxes, you never put them back up.”

He also argued that the 15-centime discount will “help everyone, including professionals who are exempt from paying fuel tax.”

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