The French government on Tuesday suspended planned increases in three taxes on fuel for a six-month period starting January 1 in response to nationwide protests against high pump prices and living costs, Prime Minister Edouard Philippe announced.
“This anger, you'd have to be deaf or blind not to see it or hear it,” Mr. Philippe said in an address.
“The French who have donned yellow vests want taxes to drop, and work to pay. That's also what we want. If I didn't manage to explain it, if the ruling majority didn't manage to convince the French, then something must change.”
The so-called “yellow vest” movement, which started on November 17 as a social-media-organised protest group named for the high-visibility jackets all motorists in France must have in their cars, has focused on denouncing a squeeze on household spending brought about by Mr. Macron's taxes on fuel.
The government's decision to push ahead with an increase in fuel taxes from January, part of a longer-term effort to discourage fossil fuel use, angered people in rural or outer urban areas who use their cars more.
Suspension to cost 2 billion euros
The suspension of planned fuel tax increases for six months will cost 2 billion euros ($2.3 billion), a government source told Reuters on Tuesday.
This hole in public finances would be funded entirely by corresponding spending cuts so that the budget deficit did not veer from its planned target of 2.8 per cent in 2019, the source said.
