“Tax less” on fuel in the event of an increase in the price of oil, “and more in the event of a fall”: this is the proposal made on Monday by Terra Nova, after weeks of heated debates about the price at the pump.
“In the event of an increase in international barrel prices, the tax rate could decrease to mitigate the impact on prices at the pump. On the contrary, the tax rate would increase when prices fall, to preserve the incentive for decarbonization” , explains climate economist Quentin Perrier in a note that the left-wing think tank will publish during the day, while the price of fuel is close to 2 euros per liter.
Adjust “weekly”
The measure already existed in France between 2000 and 2002, under the Jospin government, under the name “floating TIPP.” But this system suffered from “three important flaws”: its governance (each increase or decrease in taxes had to be voted on by Parliament), its complexity and its slowness to be reflected in the service stations.
To remedy this situation, the note suggests defining each year in the finance law a scale that would automatically fluctuate the rate of taxes on fuel depending on the price of a barrel.
Thanks to this mechanism that does not require a vote, gas stations could adjust the price at the pump “weekly”, “based on barrel prices observed in international markets.”
For example, if France had adopted a system that cushioned half of each increase in the price of a barrel through tax cuts, the price of diesel would not have exceeded 1.73 euros per liter in 2022, calculates Quentin Perrier.
At such a price level, “we can foresee” that the expensive discounts at the pump decided by the government “would not have been necessary.” Modulating fuel taxes would have a “probably limited” cost to public finances, he further stated, while the 2022 rebate at the pump would cost “almost €8 billion.”
Source: BFM TV
