the wealthiest benefited more from the 18-cent rebate than the poorest

The discount of 18 euro cents on fuel prices benefits, in absolute terms, more well-off households, estimates the Economic Analysis Council (CAE) in a study (pdf link) published Thursday, July 21. This flagship measure of the government to mitigate the impact of inflation on households must be extended and could go from 18 to 30 cents per liter discount, according to discussions taking place in the Assembly.

“The first observation that can be drawn on fuel consumption is that it is the wealthiest who consume the most”, advances the body placed with the Prime Minister and responsible for enlightening the economic choices of the executive. The 10% of French people with the highest incomes thus consumed more than 200 euros of gasoline in June 2022, compared to just over 100 euros for the 10% with the lowest incomes.

Mechanically, the wealthiest people therefore benefit twice as much from the measure. The government subsidy on petrol, which can be up to 18 cents per litre, has been“about 18.5 euros” over a month for the wealthiest households, those in the last decile, that is to say the richest 10%. Conversely, it was 9.5 euros for those in the first decile. “These data thus confirm the intuition that the price reduction of 18 cents on the price at the pump is regressive”conclude the authors of the study.

Despite inflation close to 6% over one year in June, the CAE “not seeing an increase” from low-income households with a negative balance on their current account. “People are tightening their belts, they are careful with their bank account so as not to be in the red”, comments Philippe Martin to AFP. However, no item of consumption (leisure, food, etc.) is subject to “very clear fall” in terms of expenses, he adds. The most modest French people seem to cut back a little on each of these positions.