This is a first in France: diesel at more than €2 per liter in some stations, we had never seen that. Even in July 2008, when the barrel of brent from the North Sea had crossed 147 dollars, its all-time high, prices at the pump had not exceeded €1.50 per litre. Proof, according to some presidential candidates, that the state, with its confiscatory taxation, would be the big winner from rising fuel prices.
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Invited this Wednesday, March 9 on BFMTV-RMC, Valérie Pécresse declared in particular that it was abnormal that the State is getting richer at the moment on fuel prices, and that“part of the additional taxes collected by the increase in the price of gasoline should be returned to the French “. An opinion shared by Marine Le Pen, who immediately proposed a “permanent reduction in VAT from 20 to 5.5%” on gasoline prices.
Taxes that can represent up to 60% of the invoice
But is it really the State that benefits the most from the rise in the price of black gold? The reality is much more complex. It is true that in France the taxes represent a very high part of the fuel prices, being able to go up to 60% of the final invoice. In detail, diesel and gasoline are taxed through VAT (at 20%) and the TICPE, this tax on petroleum products, in which the carbon tax is incorporated.
Since 2014, this has increased significantly, since it has gone from 42.8 to 59.40 euro cents per liter for diesel, and from 60.7 to 66.29 euro cents per liter for unleaded 95. Except that, contrary to what we sometimes hear, the TICPE – frozen in 2018 after the yellow vests crisis – absolutely does not depend on market prices excluding fuel tax, but on the number of liters consumed.
Only VAT can lead to additional revenue
When the price per barrel rises, only the VAT can therefore generate additional tax revenue. But these are relatively limited. According to our calculations, for 1 liter of diesel going from 1.45 to 2 €, the VAT will have increased from 24 to 32 centimes per litre, that is an increase of only 8 centimes per liter for the State.
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Ultimately, if, as some candidates are proposing, the future government decides to reduce VAT from 20 to 5.5% on fuel, the gain would therefore be relatively limited for consumers, around fifteen euro cents with current prices.
More advantageous would be the proposal to make the TICPE a floating tax, like what the Jospin government did in the early 2000s. Problem, in addition to depriving the State of a very important revenue – in 2021, the TICPE brought in a little more than 20 billion euros, i.e. the fourth revenue of the State -, this would be giving a very bad signal to the energy transition, as Bruno Le Maire recently reminded us at The cross.
The European Commission to tax oil tankers
There remains one proposal which is beginning to gain more and more support from presidential candidates: that of taxing the real winners of the rise in oil prices, namely the oil companies themselves! The candidate of La France insoumise, Jean-Luc Mélenchon, has been pleading for this option for a long time. In recent days, Marine Le Pen (RN) and Yannick Jadot (EELV) have followed suit.
More unexpectedly, the liberal European Commission made the proposal earlier this week. In its plan to end its dependence on Russian hydrocarbons, Brussels has indeed announced that it will allow states to tax the profits of energy companies generated by the surge in prices, in order to be able to redistribute them.