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JOHN LICHFIELD

OPINION: France must do more on fuel prices or face rebellion this summer

The French government's aid for drivers hit by soaring fuel prices has so far been limited - John Lichfield argues that they must do more or face a 'yellow vest' style revolt by the summer.

OPINION: France must do more on fuel prices or face rebellion this summer
The 'yellow vests' protests of 2018 began as a protest over fuel prices. Photo by MEHDI FEDOUACH / AFP

One of my neighbours in a hill village in Normandy drives to work in Caen every day, 90 kilometres return. Since the Ukraine war began, the bill for his weekly commute has increased by around €16 and is now €90 a week.

As Fabrice earns the minimum wage of just under €300 a week (after taxes and social charges), this is a significant chunk of his income.

“I don’t understand why the government doesn’t just reduce the taxes at the pump,” he said. “Everyone knows that half of what we pay for petrol and diesel goes to the government.”

Actually, Fabrice is wrong about that. The share of taxes in pump prices in France is more than half. It is about 57 percent (16.4 percent VAT; 40.7 percent energy tax).

Petrol and diesel prices were already rising before Vladminir Putin invaded Ukraine and the 21st century. They rose by around 30 centimes a litre in the last three  weeks, more on diesel than on petrol. For the last two or three days, pump prices have been falling as the market for crude and refined diesel falls.

The average across France on Wednesday is reported to be €2.03 for diesel and €1.97 for leadless petrol (sans plomb 95). At the end of January, it was roughly €1.70 a litre. When the Giles Jaunes revolt in provincial France began in 2018 it was around €1.50 a litre.

The government’s response, so far, has been to announce a 15 centimes a litre rebate on all petrol and diesel from  April 1st for four months – both at the pumps for motorists and in bulk supplies for truckers, farmers and fishermen. Why so little and so late?

The government says the rebate represents the whole of the €2 billion in extra taxes which the oil price rises have generated for public funds. To have reduced fuel taxes would have taken too long and involved recalling parliament. It would have given no benefit to professionals who pay no tax on their fuel.

Why the rebate has to wait until April 1st is unclear.

Anger is growing.

Three fuel depots in Brittany – at Brest, Lorient and near Rennes – are being blocked today by a coalition of truckers, farmers, fishermen and public contractors. They say that, with the fuel price so high, taxes or no taxes, it is no longer worth going to work.

Further measures, industry by industry, are expected when the Prime Minister, Jean Castex, announces its Ukraine war “resilience” package for the French economy on Wednesday afternoon. Castex is likely to announce compensations to truckers, fishers and others in the form of reductions in other charges.

Many questions remain.

The fuel price hikes are unlikely to change the direction of a presidential election campaign which is drifting towards a victory for President Emmanuel Macron on April 10th and 24th. If the high prices continue, they could produce a damaging backlash against Macron and his allies in the parliamentary elections in June.

To the high pump prices must be added an upward spiral in food prices and a shortage of vital industrial commodities like aluminium and titanium if the Ukraine war and sanctions on Russia last into the summer.

The government – and all European governments – will be praying for a continuing fall in crude prices in the days ahead. There is no obvious reason, other than speculation, why they rose as high as they did this month.

The European Union has not blocked oil or gas imports from Russia. The United States did so but scarcely buys any. Britain plans to do so, but not before 2023.

In other words, there is plenty of petrol and diesel available – for now.

The reason why French diesel prices have overtaken petrol prices (despite being taxed at a lower rate) is that France imports more refined diesel from Russia than petrol. Speculation on “possible futures shortages” on the main European oil market in Rotterdam has sent the wholesale price of both soaring.

Someone is making a lot of money from the problems of people like my neighbour Fabrice and the Norman fishers who say they can no longer afford to go to sea.

The French government – all EU governments – should consider windfall taxes on companies and individuals who make a killing from the Ukraine war.  The “oiligarchs” are not just in Moscow or Kensington.

The French government might start with TotalEnergies, ex-Total, the French energy giant, which made billions of euros in extra profits from the rise in market oil prices last year. TotalEnergies, unlike say BP and Shell, is also refusing so far to abandon its interests in Russia.

Declaration of no interest: I have an electric car. I can drive smugly past the big totems outside my local Super-U announcing pump prices over €2 a litre. I am pleased to see that President Macron is planning to announce, as part of his election programme, new government subsidies to make the leasing of electric cars affordable for people like my neighbour, Fabrice.

But that will take time. The government may be lucky and oil prices will continue to fall in the weeks ahead. Macron and Castex would be foolish to count on it. 

More needs to be done about fuel prices, and rapidly, if there is not to be a Yellow Vest-type rebellion in provincial France this spring and summer.

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JOHN LICHFIELD

OPINION: Macron’s speech revealed his long game for France, but is it a game he can win?

In the wake of Emmanuel Macron's (unusually brief) speech to the nation and an orgy of blame and speculation, John Lichfield takes a look at how the turbulent months ahead are likely to play out in France.

OPINION: Macron's speech revealed his long game for France, but is it a game he can win?

In eight minutes on Wednesday evening, we saw the best of Emmanuel Macron and the worst of Emmanuel Macron. In his TV address to the nation, he was confident; he was solemn; above all he was brief.

He accepted that the hung parliament elected last Sunday reflected “deep divisions” in the country. He said that France  must “learn to govern differently…We must build new compromises…based on dialogue, open-mindedness and respect”.

But he failed to admit any share of responsibility in the impasse which voters have created. He said that he still had a “clear mandate” from his Presidential victory in April. He called for compromise but said that some of his own promises – no new taxes, no increased debt – were untouchable.

Hear more analysis from John and The Local team in our Talking France podcast.

In April, Macron acknowledged that he had won partly through the votes of people who disliked him but feared Marine Le Pen more. He promised to govern with them in mind. He hasn’t.

His alliance drifted through the parliamentary campaign without strongly defending Macron’s presidential programme, let alone coming up with new ideas to appease the voters, of Right or Left, who supported him on April 24th by default.

That is not the only reason for the mess that France is now in. Other factors played a part: voter fatigue; inflation; the perpetual French instinct to demand “change” but resist all changes; a campaign which largely ignored the gathering threats in the world outside.

France now finds itself, by accident, in a world which the present generation of French politicians have never known – a German, Italian, Spanish or Belgian world of coalitions, compromise and shifting alliances.

This was the world – a world of revolving-door governments –  which Charles de Gaulle devised the Presidency-dominated Fifth Republic to replace. Some argue that the return of parliamentary power will be A Good Thing.

It will generate more profound political debate and a culture of constructive compromise. I doubt it. The new National Assembly – with nine political groups, including large blocs from the Hard Left and Far Right – will be more bear-pit than Periclean Athens.

There has been a witch-hunt going on in the French media about who is “responsible” for the fact that Marine Le Pen’s Rassemblement National leaped from 8 seats to 89 in the new Assembly.

READ ALSO Is there really a ‘voter surge’ to the far-right in France?

The Left, both in France and abroad, has blamed President Macron’s Ensemble! alliance for failing to give clear advice to its supporters last Sunday to vote for the Left in two-way, second round contests with Lepennist candidates. As a result, they say Le Pen won at least 30 seats which might have gone to the Left-Green alliance, Nupes.

They fail to point out – and the French media has only belatedly started to point out – that exactly the same thing happened, only more so, with those Left voters who faced second round races between Macron and Le Pen candidates. Almost 60 percent of the Far Right victories – 53 – came in two-way contests  between the Rassemblement National and Macron’s Ensemble! alliance.

Exit polls vary but all of them suggest that voters of the Left  abstained, or even voted for Le Pen candidates, to “screw Macron” more than Macron voters abstained or voted Le Pen to “screw” the Left.

In effect, the Macron alliance and the Left-Green alliance shot themselves collectively in the feet by abandoning the so-called Republican Front against Le Pen. Each might have won at least 30 extra seats if both had voted for one another. The Macron alliance might even have just scraped a majority – which is presumably what Left-Green voters wanted to prevent.

A similar hue and cry is in progress against the Macron camp for its alleged willingness to work with Le Pen and her deputies in the new parliament. There has been some loose talk by some Macron allies. Most senior Macron lieutenants have ruled out deals or alliances with the Far Right bloc.

But what of Macron himself, who asked Marine Le Pen when they met on Tuesday whether she would contemplate joining a government of national unity? He asked the same of most of the party-leaders he met.

All refused and as Macron said in his eight-minute address, the idea is impractical and unjustified.

Why raise it at all then? Especially with Le Pen?

Partly, I think, because Macron believes that as President of the Republic he cannot pretend that the 89 Far Right deputies do not exist. Partly, I believe that Macron is playing a would-be clever waiting game.

He sees no real prospect of a long-term alliance with the 64 centre-right deputies. He expects in the short term to conduct  urgent business – including a new anti-inflation package  -through ad hoc alliances with the centre-right and moderate Left.

In the longer term, he believes (and maybe hopes) that such cooperation is doomed to fail. He wants to be seen to have given all combinations of parliamentary peace a chance before he “declares war” and calls a new legislative election next year.

Hence last night’s message. What are all the groups in parliament – including the three Macron-supporting ones – prepared to concede to allow the vital business of government to continue?

It might have been smarter politics if Macron had said, more clearly, that he also is ready to make concessions and listen to other people’s ideas.

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