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France to increase taxes on controversial diesel fuel

Reuters/Eric Gaillard

The French government has announced a rise in the price of the controversial diesel fuel just weeks ahead of Paris Climate Change Conference.

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“The government will increase taxes on diesel over the next five years (…) with the aim of bringing the price of both fuels (petrol and diesel) to roughly the same level”, it said in a statement on Wednesday.

Diesel fuel taxes will rise by one cent for each litre in 2016 and 2017, “generating an income of more than 245 million euros”, said French Secretary of State for the Budget Christian Eckert.

Diesel is currently taxed at some 20 cents cheaper per litre than petrol and represents 80 per cent of fuel volumes sold in the country and 56 per cent of new-car sales.

The current way of taxation has led to more and more cars running on diesel and it “has triggered legitimate concerns among many French people about the impact of air quality”, said the government.

In return, the government, which fears criticism over its tax policy, said it will use the new income to reduce local tax for modest households and pensioners.

(The National Assembly also passed on Wednesday a two billion euro plan in tax cuts for low-income households.)

The measure comes ahead of the Climate Change Conference in Paris (30 November – 11 December) which aims to secure a pact on greenhouses gases and amid revelations that Volkswagen has equipped 11 million of its diesel cars worldwide with software that can dodge pollution controls.

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