TRUE OR FALSE.  Do the 7,600 million spent on fuel discounts represent two and a half years of investment in the rail network?

TRUE OR FALSE. Do the 7,600 million spent on fuel discounts represent two and a half years of investment in the rail network?

Lower prices at the pump, whatever it takes. Elisabeth Borne announced, on Sunday October 16, an extension of the current discount of 30 cents per liter of fuel “until mid-November”, haswhile the price of unleaded 95 rose more than seven cents and diesel almost 12 euro cents last week.

The two weeks of additional bonuses (this aid was initially going to be reduced to 10 cents on November 1) will cost the State about 440 million euros, according to the echoes Since April, nearly 7.6 billion have already been budgeted to finance this boost (18 cents per liter discount from April to August, then 30 cents from September).

Faced with the cost of this measure, voices are raised: couldn’t taxpayers’ money have been better spent? On Twitter, Michel Magniez, deputy mayor in charge of environment and sustainable development in Saint-Quentin (Aisne), takes out the calculator: “To finance the purchase of fuel by motorists for a few months, the State has spent the equivalent of everything it invests in the rail network for two and a half years!” Does the budget allocated to the fuel discount really represent the equivalent of several years of investment in railways or other mobility alternatives, as this elected official affirms?

In his statements, Michel Magniez refers to a statement by Clément Beaune, Minister Delegate for Transport, to the Senate October 12. Asked about the modernization of rail transport, the Minister explained that a “very important budgetary effort”numbered in “2.9 billion per year for 10 years”, it is well planned by the government. A commitment acquired by virtue of the execution contract signed between the State and the SNCF, which sets the amount of public investment allocated to the renovation of the railway network for the period 2021-2030. The 7,600 million euros that have been allocated to finance the fuel discount for several months, compared to this budget, effectively represent the equivalent of 2.6 times the sum of the annual investments in railways.

But beyond rail transport, the billions dedicated to the bonus could have financed other types of transport. For example “fifteen years of an ambitious bicycle plan, with an annual cost of 500 million euros”, according to Valentin Desfontaines, responsible for sustainable mobility at the Réseau action climat association. According to the calculations of WorldWith such an envelope, it is also possible to build tens of thousands of kilometers of cycle paths or hundreds of photovoltaic parks.

“This budget of 8,000 million is also the financing of one million conversion bonds, amounting to 8,000 euros, for the acquisition of a less polluting vehicle”, says Valentin Desfontaines. According to a study by the Climate Action Network (page 36, in PDF) published on October 18, a bonus of such an amount, added to the current system of ecological bonuses and local aid, would allow a household with modest income to purchase an electric city car for just 1,000 euros. “If we had acted earlier to transform mobility, we could have reduced the dependence on the car” heat, laments Valentín Desfontaines, listing the projects that could have been financed with the fuel discount budget. “Obviously this would have limited the impact of rising fuel prices on households, but also on the state budget.”

But given the urgency of the energy crisis, did the government have any other option than to subsidize fuels? “To fight against inflation, most European countries have implemented a tariff shield”, concedes Anna Creti, an economist specializing in energy issues. Germany and Spain, for example, have introduced a tax reduction or a subsidy that allows pump prices to be reduced by around 20 cents per litre.

“The message is not that help should not be provided, but that it should be targeted at low-income households”, insists on specifying Valentin Desfontaines. If the fuel discount has been “extraordinarily expensive”according to Mireille Chiroleu-Assouline, it is “Because it has benefited everyone. The wealthiest households could have adapted very well and used their vehicles less.”, assures the economist, environmental specialist. According to a note from the Council for Economic Analysis (in PDF) Published in July, the fuel discount benefited the richest French households twice as much as the poorest households (18.50 euros compared to 9.50 euros). The government is also considering more targeted aid from January 2023.

In any case, the discount on fuel can only be considered as a solution “short term”stresses Anna Creti. “Giving a fuel bonus does not provide any long-term benefit”, unlike investments in alternative transport. The price of oil will also remain at a high level, warns the economist, due to “Russian oil embargo and OPEC production cut”. Without a strategy to mitigate dependency on fuel consumption, “There will come, therefore, a time when we will be caught in the face of a price increase”predicts Anna Creti. “Everyone will also understand that we cannot permanently maintain a measure that is also an incentive to consume fuel, therefore fossil fuels”, Bruno Le Maire already warned at the microphone of BFMTV on October 17. Currently, the end of the fuel subsidy scheme is set for December 31.


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