The French government has announced an allocation of 450 million euros to extend fuel subsidies until the end of the year, helping companies and workers affected by the economic consequences of the war in the Middle East.
Details of the subsidy package
France's Minister of Economy and Finance, Roland Lescure, stated at a press conference on Tuesday that "we hear the concerns of the French people, which sometimes manifest as anger." He also emphasized that "these concerns and anger must be addressed."
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The subsidy package includes a subsidy of 0.15 euros per liter of non-road diesel fuel for farmers and a subsidy of 0.20 euros per liter for trucks of construction companies. Additionally, the subsidy for low-income individuals who need to drive for work will increase from 0.20 euros to 0.40 euros.
Cost predictions and economic context
David Amil, the budget minister, has estimated that France will spend about 1.4 billion euros on subsidies this year. Since March, the French government has believed that it should combat rising energy prices using targeted subsidies and avoid public tax cuts that could worsen the country's financial situation.
Conflicts in the Middle East have pushed oil prices to their highest level since May, and gas prices have more than doubled since the bombing of Iran by the United States and Israel in February. This situation has led to the closure of the Strait of Hormuz and has put additional pressure on fuel prices in France.
Emmanuel Macron, the President of France, has made significant efforts in recent days to warn the public and address this issue. On Friday, he informed party leaders and presidential candidates about how global conflicts have driven up fuel prices in France and told reporters that France will also hold a special G7 meeting to discuss rising energy prices.
Macron has also asked Ursula von der Leyen, President of the European Commission, to facilitate EU regulations regarding fuel quality and methane emissions.
On Tuesday, Macron also referred to a discussion with Donald Trump, the President of the United States, regarding the suspension of strikes in the energy sector between Ukraine and Russia.
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