Why the fuel tax is so high

Why the fuel tax is so high

"Stop the racket. "Let's block everything. "Calls for blocking roads to protest against soaring fuel prices, November 17, are multiplying in recent days on social networks. Here and there, some first gatherings are already organized. Friday morning, a procession of about 500 cars, trucks, motorcycles and other tractors driven by private individuals, contractors, taxi drivers or farmers conducted a snail operation in Dole, in the Jura. This Saturday, it is in the Puy-de-Dôme, on a carpool parking lot in Saint-Beauzire, that nearly 180 people have released their "yellow vests", rallying sign of this movement.

Echoing French anger, Édouard Philippe, on his way to Vietnam, came back to this very unpopular price hike. "It's complicated but there is no choice, there is really no choice and in a way there is urgency. "

"I hear perfectly the growl […] but I say today as I have always said that there is no magic solution to the problem of climate change, "insisted the Prime Minister, thus reaffirming the government's position on the necessary increase in taxes on the most polluting energies, especially diesel.

A step back is needed to understand when the "green taxation" date and where the additional revenue goes. Because when you fill up, you fill your tank and … the state coffers. Approximately 60% of the price quoted at the pump corresponds to taxes. And this proportion will continue to climb.

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Why is fuel taxation so high? Whose fault is it, to the current government or to the previous shift team? Answer: both.

The carbon tax jumped

In 2015, with the Ecological Transition Law, François Hollande introduced a carbon component into the Domestic Energy Consumption Tax (TICPE), the main tax on fuels. This is known as the carbon tax, which concerns both gasoline and diesel fuel, the purpose of which is to encourage consumers to switch to other types of energy. And from the outset, it has been planned that this carbon tax will increase steadily, from € 7 / tonne of CO2 in 2014 to € 100 / t of CO2 in 2030, and € 65 / t in 2022, at the end of the five-year period. . The initial idea was also to end the advantage of vehicles running on a diesel engine. Because this carbon tax has more impact on diesel than on SP 95 or SP 98.

According to the French Union of Petroleum Industries, an increase of € 7.50 / t of CO2 increases the liter of diesel by 2 cents, the liter of gasoline by 1.7 cents. In order to converge the prices of the two fuels, it was also decided under the old five-year period, after the dieselgate scandal, to lower the tax on gasoline by one cent and to increase it by the same amount on diesel fuel.

Upon coming to power, Emmanuel Macron went into high gear. To reconcile the two taxes he chose … to increase the two, but one more than the other. Explanations. First, the rise of the famous carbon tax will improve well in the coming years, but more than originally planned. In 2022, it will no longer be 65 € / t of CO2, but 86 € / t. + 32%! This was voted in 2017 in the budget for the year 2018. Then, diesel is entitled to special treatment. Until 2021, to make up for the price of gasoline, it will be taxed each January of 2.6 cents per liter.

A tax … on a tax

Finally, add to this a little subtlety that weighs down the note: the VAT applied on fuels is calculated on the price that includes the TICPE. Clearly, motorists pay a tax … on a tax. All these elements taken into account, it is the moment to leave the calculator. By 2022, taxes on diesel will jump nearly 23 cents per liter and those on gasoline almost 11.5 cents.

Obviously, it pays big. In its budget for 2019, the government predicts that the TICPE – fourth tax resource after VAT, income tax and corporation tax – will bring in € 37.7 billion. Of this sum, € 17 billion will go into the pockets of the state, including € 2.9 billion generated by "the continuation of the rise in energy taxation". € 12.3 billion will be allocated to local authorities, € 1.2 billion will be devoted to transport infrastructure. And only € 7.2 billion – or 19% of the total – will go into the special account "ecological transition", which is used in particular to develop renewable energies.

Households will feel the pain. In a report on the 2018 budget, the Senate last year assessed the impact on households. According to his calculations, for a family that rolls a lot with a diesel, the rise in taxes will induce an additional annual cost of € 272 in 2022, compared to 2017.

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