With seven months to go before France's presidential election, the cost of filling a tank has become a central political battleground. Spiralling energy prices, driven by the conflict in the Middle East and the closure of the Strait of Hormuz, have stoked public anger and forced the government in Paris to respond with new measures.
In recent weeks, fishermen have blockaded oil depots and port entrances along the Mediterranean coast, while farmers have taken to the streets in several regions to protest against the rising price of diesel and petrol. The unrest is a stark reminder of the 2018 gilets jaunes movement, which began as a revolt against fuel taxes and escalated into one of the most serious social crises of the Fifth Republic.
French diesel prices hit a fresh record of €2.41 per litre on Sunday, according to official data. Petrol prices have also climbed above their previous 2022 peaks: SP95-E10, the most popular unleaded grade, now averages over €2.17 a litre, while SP98 exceeds €2.28. These levels, adjusted for inflation, have already surpassed those that triggered the gilets jaunes protests, notes Anna Creti, professor of economics at Paris Dauphine University.
Government response and fiscal strain
On Tuesday, the government announced an expansion and extension of its targeted fuel relief measures for households most affected by the price surge. The new package will cost €450 million, bringing total spending on fuel relief to €1.4 billion. This comes at a delicate time for France's public finances: the budget deficit is projected to reach 5.4% of GDP this year, one of the worst in the European Union, while public debt is nearing 120% of GDP—its highest level since 1978, as recent analysis has highlighted.
The government has also proposed a so-called "fuel golden rule" for its 2027 budget, under which any additional tax revenue generated by rising fuel prices would be neutralised and redirected towards consumer support. The aim is to ensure that the state does not profit from higher prices at the pump, a politically sensitive issue given the widespread perception that fuel taxes are already too high.
France's fuel taxes are among the highest in Europe. The TICPE (domestic consumption tax on energy products) is charged as a fixed amount per litre, and VAT at 20% is then applied on top of that, meaning motorists pay tax on tax. This structure, as Creti explains, "provides a significant source of revenue for the government, but it also places a heavy burden on the final price of fuel."
Since March, the government has opted for targeted subsidies rather than generalised tax cuts. Economy minister Roland Lescure told reporters on Monday that this approach would remain "unchanged", focusing assistance on the households and sectors most exposed to higher fuel costs.
Who benefits from high fuel prices?
Retail fuel prices in France are largely market-driven, but the sector is subject to significant government oversight. Fuel retailers must report their prices through a public comparison platform, and contracts between distributors and oil companies detail promotional campaigns, profit margins, and supply-chain procedures. As Creti notes, "it's not as chaotic a sector as it's sometimes portrayed."
The real profit margins, she adds, lie in refining rather than distribution. "There's also a lot of competition downstream in terms of independent fuel stations, foreign companies, but also Total, which can indirectly control prices by setting them." TotalEnergies, with its extensive network of service stations, has periodically introduced price caps to limit what customers pay per litre, putting competitive pressure on other retailers to follow suit.
France's heavy reliance on diesel also amplifies its vulnerability. "France has one of the largest fleets of diesel vehicles in Europe," says Creti, and diesel is used not only for personal cars but also for commercial transport and industrial applications. Because France imports a larger share of its diesel than its petrol, it is more exposed to international shortages and higher wholesale prices.
The current crisis has already had ripple effects across Europe. In Czechia, the government has capped fuel margins and trimmed diesel duty to ease the burden on drivers. Meanwhile, the recent US-Iran talks have offered some hope of easing supply pressures, but the situation remains volatile.
For French presidential candidates, fuel policy has become a defining issue. Diane Bollet, associate professor of politics at Sciences Po Paris, argues that the gilets jaunes movement forced politicians to take a clear stance on fuel prices. "It really pushed politicians to have to say whether they recognised the impact of rising fuel prices and to what extent they would act," she says. With the election approaching, that pressure is only intensifying.
As public frustration grows, the question of who bears the cost of the energy transition—and who profits from high prices—will likely dominate the campaign trail. The government's fiscal constraints, however, leave little room for manoeuvre, and the spectre of renewed social unrest looms large.
