Does the surge in fuel prices benefit the state? The question caused controversy this Thursday, pitting Bercy against the president of the Hauts-de-France region. After demanding at the beginning of September a rebate of 10 to 20 cents on pump prices, which are close to two euros per liter, Xavier Bertrand returned to the charge on Thursday morning. Guest of Cnews, the former minister accused the State of “enriching itself on the backs of the French”. And to speak directly to the Minister of Economy and Finance, Bruno Le Maire: “You are reaping a jackpot right now!”
According to him, “when oil increases, the State sees its tax revenues increase. In addition, VAT in France applies to oil. But it then applies to the TICPE, which means that all of this constitutes a jackpot.” An observation which pushed Xavier Bertrand to question “the additional tax revenues”, which would fill the state coffers.
These assertions were not to Bercy’s taste. In a press release released Thursday evening, the Ministry of the Economy and Finance insists: “There was no jackpot” for the year 2022-2023. On the evolution of tax revenues, more precisely, Bercy first gives an update to the former Minister of Labor, and confirms that “the increase in fuel prices” has indeed “resulted in an increase in VAT revenue on fuels used by households of around 2 billion euros in 2022 and 2 billion euros in 2023.” However, still according to the ministry’s services, this bonus only half filled public finances: 25% of VAT revenues are redirected to communities – including “1.5 billion euros for the Hauts-de region -France”, takes care to specify the ministry -, and 25% towards Social Security. The additional VAT only weighed two billion euros for the State alone, as well.
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Alongside the additional two billion euros collected, the fuel rebate cost 7.5 billion euros, and the workers’ fuel allowance represented 500 million euros, Bercy then calculates. Conclusion of the government response: “The State spent four times more to cushion the impact of fuel prices on households than it “benefited” from high prices.” There is therefore “no jackpot”, retorts the ministry.
The government response is also an opportunity to send a final jab to Xavier Bertrand, accused of lacking “coherence”: his region has “decided to increase the tax on fuel (TICPE) to the legal maximum”. It remains to be seen whether this argument will convince the regional president, who calls, for his part, to “give back” to the French “what we take from them in addition” with inflation.