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French PM rejects large-scale tax cuts on fuels in the face of tight budget constraints

Sebastien Lecornu, the Prime Minister of France, said that France would 'continue to only offer limited relief to consumers who are impacted by high fuel prices.

Paris, unlike other European countries, has refused to cut fuel taxes despite the fact that the Strait of Hormuz closure has driven oil prices over $100 per barrel. The reason given was the high budget deficit in the eurozone.

Lecornu said at a press briefing that "we're not changing our strategy." "We reject any reduction in fuel taxes that is indiscriminate and general."

He said that the government instead?extended targeted measures and scaled up incentives to buffer the impact on certain groups.

Lecornu said that France should also bet on its competitive advantage - a fleet nuclear reactors which produce more than two-thirds (?2/3 of) its electricity and speed up the electrification in the heating and transport sectors.

"The switch to electrification is happening whether we like or not. Were we too late to start? It's not too late, thank goodness. Do we have to move more quickly? He said, "We already are."

Taxi drivers will benefit from a new bonus that will help them finance the purchase of electric vehicles.

The maximum tax-free bonus that can be given to employees who drive to work will now reach EUR600.

Lecornu stated that the'most optimistic scenario' envisaged a return to normal conditions by autumn. However, he also stressed that a number of more pessimistic scenarios were being considered due to the high level uncertainty.

Budget Minister David Amizel said that the new package will bring total expenditure to help households cope higher fuel costs up to EUR1.2 billion. He said that the government would offset the costs by making savings in other areas and update their budget targets before the end of the month. $1 = 0.8630 Euros (Reporting and writing by Dominique Vidalon and Michel Rose; Editing by Inti and Alex Richardson).

(source: Reuters)