France isn't a country in the middle of a bailout, but its Socialist government has been making good on its pre-election buzz-word promise of "growth".
When a country is facing a significant hike in fuel prices, how does it deal with it?
In Ireland, we do nothing. Our government shrugs its shoulders, mutters something about influences beyond our control and watches the already over-taxed fuel price go up, affecting hundreds of thousands of people in the country and even being a major factor in large transport companies going to the wall.
In France, the government has taken responsibility for the situation and moved to react to the influences from outside their country – something that they said they would do before the back-to-school rush. On Wednesday last, they cut the tax on the price of diesel and petrol, reducing it by 3c per litre. At the same time, they entered into negotiation with fuel retailers, getting them to come in with a further reduction of between 1c and 3c on every litre, according to what they could reasonably afford to do.
The net result is a reduction in fuel prices by 6c per litre in both petrol and diesel; which was confirmed by official figures yesterday (Monday, 3rd of September). Having reached a record price on the 24th of august, the average price of diesel came down by 6.19c per litre to €1.3973. Unlike Ireland, there is always a big difference of around 20c per litre between fuel purchased at an ordinary filling station and fuel purchased at an automated pumps attached to one of the hypermarket chains. The lowest diesel prices available at the moment are around €1.35.
Petrol prices had also reached record heights in France and are back down to average prices of €1.5861 for “95” and €1.6428 for “98”.
This is the kind of action expected by government in France, it would appear, judging from the rather muted public reaction. Many, of course, can see that despite their government’s action, the price of fuel is still very high. Prime Minister Jean-Marc Ayrault admitted as much last week when he said that the price reduction was still “no doubt not at the level of those who need their cars.”
It’s meant to be a temporary measure of course – something that will offer respite for citizens and companies alike until such time as a more robust plan can be put in place. Time will tell, but ultimately prices at the pump are dictated by the price of crude oil and the relative value of the euro (If the currency drops, the petrol prices go up). Still though; it must be nice to live in a country where the government steps in and tries to ease the pain.