France offers €100 hand-out to poorer households as fuel costs soar

·2 min read

French Prime Minister Jean Castex has announced a 100 euro “inflation premium” for households living on less than €2,000 per month – a move intended to soften the impact of rising energy prices, and keep anger at bay six months ahead of presidential elections.

A total of 38 million French people will benefit from the payout, whether or not they have a car.

The premium will appear on private sector workers’ payslips in December, while civil servants, pensioners, the unemployed and self-employed people will receive it in early 2022.

As energy prices jump worldwide, the price of diesel in France has increased by 29 percent this year, reaching a record high of 1.5583 euro per litre on Sunday.

The price of lead-free petrol has increased by 25 percent over the last 12 months, the biggest surge in a decade.

"We believe this increase in prices is temporary," Castex said in an interview on TF1 television on Thursday evening. "But we cannot let it hobble the recovery."

Castex also announced that a freeze on household gas prices will be extended until the end of 2022.

Spectre of Yellow Vest protests

With elections just six months away, President Emmanuel Macron is seeking to limit damage to his economic record from the hike in energy prices.

The government is also keen to avoid a repeat of the Yellow Vest protests, which erupted in late 2018 following an increase in prices at the pump, before broadening into an 18-month protest against the government.

Official statistics show eight out of 10 French adults have a car.

Rising petrol prices have pressured the government to cut taxes paid at the pump, which can amount to up to 60 percent of what drivers pay.

Hard-right politician Marine Le Pen and Socialist Anne Hidalgo, both candidates in the upcoming presidential election, have called for a reduction in those taxes.

But Finance Minister Bruno Le Maire has argued that such a step would be costly to the public and would amount to a subsidy for fossil fuels.

Alain Bazot, head of the consumers association UFC Que Choisir, said the government had gotten it wrong.

The payment "is not immediate, not fair and not targeted," he told France Info. “In wanting to do something simple, we’re taking a measure that fails to take into account what people really spend."

Some people who hardly ever use their car will get 100 euros, he explained, those who use their car often won't get much help.

The best solution "remains an end to VAT on petrol”, Bazot added.

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