France Rules Out Broad Fuel Tax Cuts, Focuses on Electric Incentives
By Dominique Vidalon and Inti Landauro
France’s Approach to Fuel Prices and Electric Incentives
PARIS, May 21 (Reuters) - France will continue to offer only limited relief to consumers hit by high fuel prices, Prime Minister Sebastien Lecornu said on Thursday, announcing €710 million ($823 million) in additional support and urging a switch to electric cars.
Government Stance on Fuel Taxes
Paris has resisted cutting fuel taxes — unlike several other European countries — even as the closure of the Strait of Hormuz has pushed oil prices above $100 a barrel, citing constraints from one of the euro zone’s highest budget deficits.
Official Statement from Prime Minister Lecornu
"We're not going to change our strategy," Lecornu told a press conference. "We refuse any general, indiscriminate reduction of fuel taxes."
Targeted Relief and Electrification Strategy
Instead, the government was extending targeted measures and scaling up incentives to cushion the impact on specific groups, he said.
Nuclear Power and Electrification
Lecornu also said France should bet on one of its main competitive advantages - a fleet of nuclear reactors producing more than two-thirds of its electricity - and accelerate the electrification of the heating and transport sectors.
Progress and Acceleration of Electrification
"The shift to electrification is happening, whether we like it or not. Did we start too late? No, it's already underway, thankfully. Do we need to move faster? We already are," he said.
Support Measures for Specific Sectors
Support schemes already in place for sectors such as fishing and farming will be prolonged by three months, while taxi drivers will benefit from a new bonus to help finance electric vehicle purchases.
Additional Support for Commuters
Companies will also be allowed to double a tax-free bonus for employees who drive to work, raising the maximum to €600.
Economic Outlook and Budgetary Impact
Lecornu said the government's most optimistic scenario envisaged a return to more normal conditions by the autumn, though he stressed that far more pessimistic outcomes were also under consideration given the high level of uncertainty.
Budgetary Measures and Funding
Budget Minister David Amiel said the new package would bring total spending to help households cope with higher fuel costs to nearly €1.2 billion.
He added that the government would offset the cost through savings elsewhere and would update its budget targets by the end of June. ($1 = 0.8630 euros)
(Reporting by Dominique Vidalon, Michel Rose, Elizabeth Pineau, Writing by Charlotte Van Campenhout and Michel Rose, editing by Inti Landauro and Alex Richardson)
