Fuel: The discount of 18 cents benefits the richest more than the poorest
According to the Economic Analysis Council’s latest study note, the rebate enabled the wealthiest to save €18.50 a month, compared to €9.50 for more modest households.
On the price of fuel, the executive and Les Républicains are getting closer to an agreement on a substantial rebate in September (probably larger than the current 18 cents), which would become less significant as we approach the end of the support period in December, a study by the European Parliament concludes Economic Analysis Council (CAE) added new elements to the debate.
In his studythe financial situation of households at the beginning of the energy crisis‘ the Matignon-affiliated organization estimates that the wealthiest will benefit most from the 18 centimes per liter discount, as they are the biggest petrol consumers. “The largest petrol consumers also belong to the wealthiest households. So the discount of 18 cents on the pump price is regressive. It benefited twice as much in the last decile (approx. EUR 18.50) as in the first decile (EUR 9.50)“, specifies the note from the CAE.
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“The richest benefit twice as much”
A situation confirmed by Philippe Martin, CAE delegate president, on Friday at France Inter : “The richest 10% spend an average of around €200 per month on petrol, the poorest 10% around €100. The math is simple, it will do the richest twice as good.” And add : “From this point of view, we are more in favor of targeted measures than a general reduction in gas prices.» Vice versa hence the government’s preferred option.
Overall, around a third of households are classified as “dependent» Gasoline, ie fuel costs, accounts for at least 8% of their total consumption. However, only “a small half of them” would “financial constraint“. These French, dependent on their car and financially constrained, are mostly rural households, young single people, workers and employees, holders of small financial assets. A dependence on petrol, accompanied by rising prices, which therefore forced them to limit their other expenses to adjust.
However, despite the rise in fuel prices and inflation of 5.8% in June 2022, the CAE is not observing at this stage “very sharp and widespread deterioration in the financial situation of households“. Even on the side of the most humble households “We haven’t seen an increase in households with a negative benefit account recently», with the exception of pensioners.
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However, low-income households have completely used up their extra savings from the Covid-19 era. “Since June 2021 and until June 2022 their savings in euros are almost unchanged, which means that they have been reduced in real terms by the amount of inflation‘ the organization notes. On the other hand, although the savings of the wealthiest households have fallen slightly in recent months, they have remained at a high level ever since “In June 2022, their savings would therefore be more than 10% higher» at the level before the health crisis.
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