Fuel prices: The richest benefited more from the 18-cent fee than the poorest

The 18 cent rebate on fuel prices benefits more affluent households in absolute terms, the Economic Analysis Council (CAE) estimates in a study published on Thursday, July 21 (pdf link). This government flagship measure to mitigate the impact of inflation on households needs to be expanded and could go from 18 to 30 cents a liter rebate, according to discussions taking place at the assembly.

“The first observation one can make about fuel consumption is that the richest consume the most”, promotes the body attached to the Prime Minister and responsible for clarifying the executive branch’s economic decisions. The 10% of French people with the highest incomes thus consumed more than 200 euros of petrol in June 2022, compared with just over 100 euros for the 10% with the lowest incomes.

Mechanically, the richest benefit twice as much from the measure. The state fuel subsidy is up to 18 cents per liter“approx. 18.5 euros” over a month for the richest households, those in the last decile, i.e. the richest 10%. Conversely, it was 9.5 euros for those in the first decile. “These data thus support the suggestion that the 18 cent discount on the pump price is regressive.”conclude the authors of the study.

Despite nearly 6% year-on-year inflation in June, the CAE “sees no increase” from low-income households with a negative balance on their checking account. “People are tightening their belts, they are careful with their bank accounts so as not to get into the red.”, commented Philippe Martin to AFP. However, it is not subject to any consumption item (leisure, food, etc.). “very clear fall” in terms of spending, he adds. The humblest of French seem to cut corners a little at each of these positions.