France drives down fuel prices

The French government has struck a deal with the energy industry to cut fuel prices at the pump by six cents a litre.

The agreement will last for three months and means drivers will save 1.50 euros on every 25 litres.

The cost will be shared between the state and the oil companies and will result in 300m euros in lost tax revenues.

The announcement was made by the French Economy Minister Pierre Moscovici.

“This measure will also give us time to find a more permanent solution which is what the the president and the prime minister want”, said Moscovici.

The reduction was to come into effect within 24 hours of the announcement. It is a result of an election pledge by Francois Hollande to tackle rising fuel costs.

“It’s better than nothing, six cents here, six there, it adds up”, said one woman buying petrol.

The price cut will be reviewed after three months.

Fuel taxes are an important source of revenue for the French government which is struggling to cut its deficit in a stagnating economy.

Afficher Gas prices 28/08/2012 sur une carte plus grande

Petrol prices evolution in the EU and in the Eurozone Source: ec.europa.eu

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