Ministry Counters Retailer’s Tax Accusation
The French Ministry of Economy and Finance has firmly rejected claims that the state is the “big winner” from recent fuel price increases linked to Middle East tensions. The rebuttal came on Thursday following accusations from Dominique Schelcher, CEO of the Hyper U and Super U supermarket chains, who asserted that “more than 51% of the price you pay at the pump goes directly into the state’s pockets.”
Breaking Down the Price at the Pump
According to data from the French Union of Petroleum Industries (Ufip), the composition of fuel prices is more nuanced. Approximately 30% of the pump price covers raw material costs, 50-55% consists of taxes (VAT and excise duty), and 15-20% accounts for distribution costs. The ministry emphasized that the primary excise tax on energy products does not fluctuate with the market price of fuel.
“The only part that increases when prices rise is the VAT,” set at a fixed rate of 20%, a ministry spokesperson clarified during a press briefing. The ministry further argued that an oil price shock is “never good news for public finances” as it negatively impacts economic growth and, consequently, state revenues.
Government Assures Supply and Monitors Pricing
In response to the situation, the economy ministry met with fuel distributors to ensure they do not implement excessive price hikes disproportionate to the rise in oil prices. The Ufip reported that the meeting concluded with a unified stance on supply security, stating there is “no rupture, no fear to have about supply,” with a national station functionality rate of 97%.
Minister Roland Lescure had previously urged calm, asserting there would be no national shortage. Government data showed the average price for a liter of SP-95/E10 gasoline reached €1.78 on Thursday morning, a seven-cent increase since February 27.
