Between the fuel shortage and the end of certain aids on October 31, economist Marc Touati estimates prices will skyrocket. In particular because of the strategic error “at any cost” that will weigh on French taxpayers.
Can the state continue to subsidize the price of petrol?
This tariff shield is a big patch, which has already cost 25 billion euros, which will be extended until 2023 and will cost at least as much next year. On this credit that there is no more magic money like in the times of Covid. No more “at any cost” this time, which was funded entirely by the European Central Bank (ECB).
As government debt rose, the ECB bought it, leaving interest rates very low. There they are at 2.19 points and it keeps turning. This will cost the French state 100 billion euros over 10 years. In fact, we find ourselves in a great paradox, because what we give for the price of petrol on the one hand, we have to pay very hard on the other. It would be far wiser to have a variable tax and maneuver it to cap the price at the pump while guaranteeing revenue for the state.
Renting an electric car during the fuel shortage, impossible mission?
Do we have to pay 2.50 euros for a liter of petrol?
The increase in the price of gasoline will be very strong. We will initially exceed €2, this is inevitable when the aid is discontinued. Even if oil prices fall again, which the government is hoping for. But if oil prices go down, that means we do entered a deep recession. We have created too much artificial demand with national debt, money printing and magic money! However, the only way out of inflation, it’s awful to say, is to go through the recession box. Prices rise so much that demand collapses. Inevitably, prices will begin to fall. The state is letting go, trying to buy time, hoping that inflation will magically come down. It’s a big strategic mistake because we’re trying not to hurt ourselves in the short term, but awakening will be very painful!
And who pays in the end?
It’s the French taxpayer, the citizen, the consumer. Either because of the recession, the rise in interest rates or a tax hike. With the fall of the euro, it’s four times the penalty! I kept advising Bruno Le Maire that he must retire, whatever it takes. I was told not to worry that it will be funded by the ECB. Today we have to pay the bill!
But should this help at the pump avoid consumer dissatisfaction?
But if we had won social peace, it could have been useful, but it’s not even the case. The Insee household climate index is at a historically low level. Lower than during the health crisis, lower than during the yellow vest crisis. We’re back to the level of attacks from 2013. It should have been explained that the rising national debt has to be paid and that taxes are likely to rise. But we prefer to stay short-term and upside down, we don’t have a 10-year vision, that’s extremely dangerous. The problem is that we used up all our cartridges during the covid. Now we’re out of bullets! We denied reality, we veiled our faces and then we slipped.
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