practical
French government rules out further fuel aid: how much tax is in one litre of fuel?
Calls to cut VAT on fuel sales could cost billions
The French government has again ruled out fuel tax cuts or price caps following meetings with industry leaders last week (September 9), despite petrol prices reaching record highs this week.
Such measures are too expensive and would only contribute to increasing debt, said the Finance Ministry to public service broadcaster France Info following the meeting.
It comes as industry leaders including Michel-Édouard Leclerc, head of the E.Leclerc supermarket chain, call for caps or other aid to limit costs.
Mr Leclerc stated in an interview with Europe 1 last week that 60% of fuel costs paid by the consumer went towards taxes.
As the graphic below shows, this is broadly correct for both petrol and diesel (gazole), if distribution costs are also included.
French fuel sales see a 20% VAT, an energy tax known as TICPE (Taxe intérieure de consommation sur les produits énergétiques, officially called accise sur les produits pétroliers), and VAT on TICPE.
Calls to drop VAT
A drop in VAT for energy rates – including fuel – from 20% to 5.5% is a long-standing policy of the far-right Rassemblement National.
The party has called for it repeatedly this year, pointing to other European countries who partially suspended or cut fuel taxes during the first part of the year.
However, reports suggest that doing so could cost the state up to €10 billion, a tall order when the government is already facing a mounting debt crisis.
The government has committed to keeping its fuel aid in place until the end of September, which includes a one-off €100 payment for those who drive to work or use their vehicle as part of their job.
Combined with support for certain sectors including fishing, logistics, and agriculture, aid schemes during the fuel crisis have cost the government €1.4 billion so far, the Finance Ministry said.
Fuel station TotalEnergies has committed indefinitely to its fuel cap of €1.99 per litre of petrol, and €2.25 per litre of diesel.
