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France’s Oil Ministry will use 115 Million Euros to Subsidize Consumers’ Energy Expenditures
International Energy Network News: The French government stated on the 11th that domestic oil producers, refiners and distributors will contribute 115 million euros to a special government plan to partially alleviate the energy expenditure pressure caused by the sharp rise in oil prices on domestic households.The funds will be shared between oil producers, refiners and distributors. The country's oil production giant Total SA provides 60% of the oil needed by the country, while oil distributors control gas stations across France.
French Finance Minister Christine Lagarde said that major players in the oil industry have agreed to contribute funds to reduce the pressure on domestic households' energy bills.
Oil prices in U.S. dollars rose 10.5% month-on-month in March and surged 44.2% year-on-year. The French government is worried that such a strong increase in oil prices will damage the consumption power of domestic households and erode the country's economic growth momentum. France’s oil expenditure in March alone reached 3.5 billion euros.
In addition, inflationary pressure is also putting pressure on the French economy. According to the French Statistics Office, the country's core inflation rate is expected to rise to 1% at the end of June, while household purchasing power only increased by 0.1% in the first quarter and is expected to increase by 0.3% in the second quarter.
Lagarde believes that the current high oil prices are mainly caused by the rapid economic development and geopolitical instability in Asia, and speculation in the oil market is only a small reason. He also pointed out that amid the rise in oil prices in US dollar terms, the rise in the euro offset some of the impact.
This part of the French Petroleum Ministry's funding will ease the 4.6% increase in gasoline expenditures per kilometer for workers in the country who commute by car.
