French President Emmanuel Macron has announced plans to pressure the country's oil sector to sell gasoline and diesel at cost prices in order to alleviate the burden of soaring fuel prices on households. Macron's government aims to mitigate the impact without resorting to significant public expenditure, as previous plans to allow gas stations to sell at a loss faced opposition from small operators.
While Macron has temporarily put these plans on hold, he emphasized that the threat remains. Prime Minister Elisabeth Borne will meet with all stakeholders in the industry to demand greater transparency on profit margins and insist on selling fuels at cost. Macron believes that addressing abusive margins in refining is one aspect where action can be taken.
The issue of fuel prices is a highly sensitive and politically charged subject in France. The Yellow Vest movement, which began in 2018, was sparked by an increase in fuel levies and escalated into widespread protests concerning living standards. In the past, the government has provided subsidies, resulting in significant costs for public finances. However, Macron dismissed the idea of reintroducing these discounts and highlighted that tax cuts on diesel and gasoline are not feasible if the government aims to finance the green transition and maintain the welfare state.
Nonetheless, Macron revealed that the upcoming budget will include measures to support low-income individuals who rely on cars for work. This support will be targeted and limited to those in need, prioritizing households requiring assistance.
The budget will also feature an increase in annual spending on the green transition to €40 billion ($42.6 billion) from €33 billion. Part of this financial allocation will be dedicated to transforming France's remaining two coal-fired power stations into biomass facilities by 2027. Macron emphasized the government's commitment to making substantial investments in this area, stating that the immediate priority is to phase out coal from the energy mix.
Overall, Macron's proposed measures seek to address the issue of increasing fuel prices while ensuring financial sustainability for the green transition and social welfare investments.