On TF1’s Journal de 20H Prime Minister Jean Castex announced last night that the French government will set up an “inflation allowance” to help people cope with the rise in fuel prices.
An amount of €100 will automatically be transferred to some 38 million “French people earning less than 2000 euros per month. Because it is the median salary,” he said on TV.
Castex explained, “For employees, it will go through the company. For the self-employed through URSSAF, etc. From December for most of them. For civil servants, it will be in January. For retirees, as soon as possible.”
This follows a week of speculation as to which direction Macron’s administration would take to combat the energy crisis. On Wednesday, Minister of Economy Bruno Le Maire had stated that a fuel voucher was “the fairest and most efficient solution from an environmental point of view” and added that while lowering taxes would be an easy solution, it is too expensive. Both the Right and Left had suggested measures including temporarily lowering energy taxes, lowering of VAT from 20% to 5.5% or creating a floating tax.
Within hours of the prime minister’s announcement, the CEO of Carrefour Alexandre Bompard tweeted, “Carrefour is committed to the purchasing power of its employees.” The company will double the “inflation allowance” to €200 euros for its employees.
Meanwhile prices at the pump rose another 2 cents last week, reaching an historic high not seen since early 2020. Diesel has gone up 22% since the beginning of the year to hit an average of €1.56 per liter, and unleaded SP95-E10 is up 20% to €1.62 per liter on average.
Castex stated last night that the “tariff shield” announced at the end of September will apply to block the price of gas until the end of 2022, and limit the increase in January to 4%. The tariff shield was set to apply until April, the expected date of the peak in gas prices before a decline.