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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure FR-2022-14/2344 Updated – measures in France

Discount on the price of all fuels

Remise sur les carburants

Country France , applies nationwide
Time period Temporary, 01 April 2022 – 31 December 2022
Context COVID-19, War in Ukraine
Type Legislations or other statutory regulations
Category Responses to inflation
– Support for fuel expenses
Author Frédéric Turlan (IRshare) and Eurofound
Measure added 19 May 2022 (updated 16 September 2022)

Background information

Since October 2021, to cope with the sharp increase of energy prices, the government has set up a so-called Tariff Shield (Bouclier tarifaire) to mitigate the impact of such increases on the purchase power of the French citizens, especially the low incomes households. This measure includes several sub-measures which have been put in place as energy costs have increased. With the beginning of the war in Ukraine, the government has added a discount on the price of all fuels of up to €0.15 (excluding VAT) per litre between 1 April and 31 July 2022, for all households and companies.

Content of measure

To contain the impact of soaring fuel prices at the pump, a discount of €0.15 per litre, excluding tax, will be applied from 1 April 2022 until 31 July 2022. With VAT, this reduction will reach €0.18 in mainland France, i.e. €9 for a 50 litre tank. In its communication, the government presents this measure as an aid to the purchasing power of the French, but it goes beyond this aspect alone, since it is also a direct aid to professionals.

This reduction applies to all fuels and to all private and professional uses: road, rail, river and maritime vehicles (including transport, tourism and fishing), agricultural and forestry machinery, construction, public works and extraction equipment, as well as stationary engines used by companies.

The discount will be applied by the wholesalers distributing the fuel in service stations, and the State will pay them a subsidy corresponding to the volumes delivered. At the stations, the discounted prices will be displayed on the pump prices.

With the 20% VAT applied in mainland France, the reduction in the pump price will reach €0.18 per litre, i.e. €9 for a 50-litre tank. In Corsica it will be €0.17, with VAT at 13%. As petroleum products are exempt from VAT in the overseas territories, the reduction will correspond to the net discount.

Updates

The following updates to this measure have been made after it came into effect.

22 August 2022

The decree of 22 August 2022 amends decree no. 2022-423 of 25 March 2022 on exceptional aid for the purchase of fuel. It extends until 31 December 2022 this aid scheme, initially planned until 31 July 2022, then extended until 31 August. It also institutes specific aid for service station operators in financial difficulty.

The decree of 22 August 2022 amends decree no. 2022-423 of 25 March 2022 on exceptional aid for the purchase of fuel. It extends until 31 December 2022 this aid scheme, initially planned until 31 July 2022, then extended until 31 August. It also institutes specific aid for service station operators in financial difficulty.

Until 31 August the discount was:

  • 18 cents (including tax) in mainland France (instead of 15 cents),
  • 17 euro cents (including tax) in Corsica,
  • 15 euro cents per litre including tax in the French overseas territories,
  • 15 euros per megawatt-hour (MWh) for natural gas,
  • 29.13 euros per 100 kg net for Liquefied Petroleum Gas (LPG-c).

From 1 September to 31 October 2022 in application of the decree of 22 August 2022, the fuel discount will change from 1 September. The amount of the aid, including tax, is:

  • 30 euro cents (including tax) per litre in mainland France,
  • 28.25 euro cents (including tax) per litre in Corsica.
  • 25 euro cents (including tax) per litre in Martinique, Guadeloupe, Guyana, Reunion and Mayotte.
  • 25 euros per megawatt-hour (MWh) for natural gas, 48.55 euros per 100 kg net for Liquefied Petroleum Gas (LPG-c).

From 1 November to 31 December the amount of the fuel discount changes:

  • 10 euro cents including tax in mainland France,
  • 9.42 euro cents including tax in Corsica,
  • 8.33 euro cents including tax in Martinique, Guadeloupe, Guyana, Reunion and Mayotte.
  • 8.33 euros per megawatt-hour (MWh) for natural gas fuel, 16.18 euros per 100 kg net for Liquefied Petroleum Gas (LPG-c).
25 April 2022

Faced with the rising cost of fuel and in order to support health professionals who travel to their patients' homes, the Health Insurance has put in place an exceptional aid equivalent to €0.15 per litre of fuel. From 25 April 2022 until 31 July 2022 (date of the end of the same amount of discount at the pump for all drivers), this aid will take the form of a €0.01 increase in the unit rate of the various kilometre allowances (an amount per kilometre that the taxpayer will be able to deduct from his or her taxable income), supplemented by a €0.04 increase in the unit rate of the various flat-rate travel allowances.

Use of measure

The government gives no data, but as of 1 January 2021, the vehicle fleet consists of 38.3 million passenger cars, 5.9 million light commercial vehicles (LCVs), 600,000 heavy goods vehicles and 94,000 buses and coaches in circulation.

Target groups

Workers Businesses Citizens
Applies to all workers Applies to all businesses Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A

Involvement

It is mainly a governmental measure, even if some social partners have been informed.

Views and reactions

Trade unions welcome a measure that is easily understood by everyone. But some trade unions have a critical point of view, as the CFDT, the main trade union confederation, which estimates the measure is 'not sufficiently targeted'. 'With the measure, which will come into force on 1 April for four months, you get €0.15 per litre of fuel in the same way if you go to your second home at the weekend and need to travel 200 or 300 km', or 'if every day you travel 30 or 40 km to go to work"', said Laurent Berger, the general secretary of the CFDT.

Employers organisation Medef welcomed the measure but would like to see the introduction of a scheme allowing companies to distribute an allowance to cover the increased costs for heavy-duty employees who drive at least 40 or 50 km a day to get to work. The state would undertake to exclude this allowance from the calculation of income tax.

Sources

  • 25 March 2022: Décret n° 2022-423 du 25 mars 2022 relatif à l'aide exceptionnelle à l'acquisition de carburants (www.legifrance.gouv.fr)
  • 25 April 2022: Une aide financière de 15 centimes par litre de carburant pour les professionnels de santé libéraux (www.service-public.fr)
  • 22 August 2022: Décret n° 2022-1168 du 22 août 2022 modifiant le décret n° 2022-423 du 25 mars 2022 relatif à l'aide exceptionnelle à l'acquisition de carburants (www.legifrance.gouv.fr)

Citation

Eurofound (2022), Discount on the price of all fuels, measure FR-2022-14/2344 (measures in France), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/FR-2022-14_2344.html

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