Key facts
- France will spend €450 million to extend fuel subsidies until the end of the year.
- The subsidies aim to help companies and workers affected by the economic consequences of the war in the Middle East.
- The package includes a €0.15 per liter subsidy on non-road diesel for farmers.
- Construction company trucks will receive a €0.20 per liter subsidy.
- Subsidies for low-income individuals who drive for work will double from €0.20 to €0.40 per liter.
- France has spent €1.4 billion on subsidies this year.
The French government announced Tuesday it will spend an additional €450 million to extend fuel subsidies until the end of the year, a move aimed at mitigating the economic impact of rising energy prices driven by the conflict in the Middle East. Economy and Finance Minister Roland Lescure stated the government is responding to public concerns and anger over the situation.
The extended package includes specific subsidies for farmers and construction trucks, as well as a doubling of support for low-income workers who rely on their vehicles for their jobs, such as nurses making home visits. Budget Minister David Amiel estimated that France's total spending on fuel subsidies this year would reach €1.4 billion. This approach of targeted fuel subsidies, rather than broad tax cuts, aligns with the government's strategy to manage its fiscal outlook.
Oil prices have surged to near their highest levels since May due to the Middle East conflict, while natural gas prices have more than doubled following the bombing of Iran and the subsequent closure of the Strait of Hormuz. French President Emmanuel Macron has been actively engaging in diplomatic efforts, briefing political leaders on the situation and calling for a special G7 meeting to address escalating energy prices. He has also requested that European Commission President Ursula von der Leyen consider easing EU regulations on fuel quality and methane emissions.