France to extend fuel subsidies until year-end — Politico Europe

The French government said it will allocate €450 million to extend fuel subsidies until the end of the year to support companies and workers feeling the economic consequences of the war in the Middle East. Politico Europe reports.

Who will receive assistance

The package provides a subsidy of €0.15 per litre of off-road diesel for farmers. Construction companies will receive a subsidy of €0.20 per litre of fuel for trucks.

Assistance for low-income people who need to drive to work will be doubled, from €0.20 to €0.40 per litre. The publication names nurses who make home visits to patients among such workers.

Economy and Finance Minister Roland Lescure said that the authorities hear the concerns of the French, which “sometimes take the form of anger,” and must respond to them. Budget Minister David Amiel estimated France's total spending on such subsidies this year at €1.4 billion.

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Rising energy prices

Since March, France has chosen targeted fuel subsidies as a way to counter rising energy prices instead of an across-the-board tax cut. Lescure noted that this approach will remain unchanged.

According to Politico Europe, the conflict in the Middle East has pushed oil prices to nearly their highest level since May. Gas prices were more than twice as high as the level before the United States and Israel bombed Iran in February, after which the Strait of Hormuz was closed.

French President Emmanuel Macron also said that he had discussed with U.S. President Donald Trump a moratorium on strikes on the energy sector between Ukraine and the Russian Federation, an aggressor state. Separately, Macron called on European Commission President Ursula von der Leyen to ease EU rules on fuel quality and methane emissions.