Blocking the price of petrol is useless and illusory

Although the government has promised to freeze petrol prices, it has little room for manoeuvre. But in the longer term, the strategic challenge is there. Hybridisation, electric, hydrogen, new materials... France has all the assets to invent the engines of tomorrow.

When the price of diesel reaches a new high of 1.45 euros per litre, it hits hard on purchasing power, which is still at half-mast and increasingly constrained. The pressure of the fuel bill is thus rekindling the demand for government measures from a political power that has trapped itself by promising to act where it has little room for manoeuvre, except by taking a very ambitious and very long-term view. This horizon is not necessarily the easiest for a government that has promised to act "before the end of the month" and that needs to show concrete and rapid measures, but it is the only viable horizon.

In the short term, it is indeed difficult to imagine blocking the price of a product whose cost is not under control. Reducing the state's tax burden is possible but expensive. 10 cents less tax to compensate for the increase of the last few months is equivalent to losing 4 billion euros in revenue, when at the same time more than 30 billion euros must be found to balance the budget. And if reducing taxes uniformly for the most modest and the most affluent (who also consume more fuel with larger engines) could be considered unfair, we would then have to revisit the fuel voucher, which had already been imagined and then abandoned at the beginning of 2011 in favour of the revaluation of the mileage scale. These measures, whatever their form, are only artificial and costly public compensation.

These societal issues, which are part of long-term perspectives and profound changes, cannot be dealt with in reaction to short-termist approaches. These issues call for a vision of a strategic State and not the illusion of a welfare State that no longer has the means to be so, either financially or structurally. Energy is going to be more and more expensive. This postulate is neither an admission of weakness, nor a sin of fatalism, it is a market fact, of which everyone is well aware, including those who would like to ignore it out of psychological denial. Consequently, the only reasonable way to reduce the energy bill, whose unit price will increase, is to reduce its volume further.

For the moment, for fuel, this volume compensation exists, but it is not going down as much as prices are going up, which explains the growing pressure on budgets.

Regardless of the expected government measures, the market and behaviour are adapting and evolving: we consume less petrol, we drive less, we manage our transport budget more carefully.

As Ufip recently pointed out, fuel consumption in volume terms fell by -0.8% between August 2011 and July 2012, and the trend is continuing with a further -1% over the first seven months of 2012. According to a BIPE study, while 76% of French people used their vehicle every day in 2010, 4% less (72%) did so in 2011. The average distance travelled by car has also fallen, by 1.11 Tkm in 2011 compared with 2010. But these developments, which nevertheless represent real efforts and changes in intentional and unintentional behaviour, are not sufficient in the face of a diesel price (80% of purchases) which is rising in double figures.

So the French compensate elsewhere, to maintain a transport budget that has remained stable at around 14-15% of the household budget since 1995! All expenses are reduced as much as possible, by favouring low-cost transport, by looking for promotions or by reducing the vehicle acquisition budget, which has fallen in 10 years from 5% of the budget to 3.3%. Each of these adjustments in turn modifies other markets, and potentially creates other collateral effects, particularly social ones. In the zero-sum game imposed by constrained purchasing power, the only possible adaptation is indeed that of cascading arbitrages.

The energy bill is therefore tending to rise. The strategic and highly political issue, beyond the occasional adjustments that are certainly necessary to cushion and accompany things, is therefore that of energy excellence in order to develop equipment and engines that are increasingly energy efficient, but in an extremely proactive and ambitious way: the ecological bonus-malus and the scrappage scheme have structurally modified the automobile market, particularly with regard to the reduction of CO2 emissions: on average, these emissions have fallen by -22g/km between 2008 and 2011 after only -1g/km in 2001 and 2007. As a result, France has already reached the European compromise target of 130g CO2/km in 2010. Regarding the increase in engine performance and efficiency, we can also observe a positive trend: in 10 years, we have consumed one litre less diesel per 100 km, dropping to 4.9l/100 in 2010 after 5.8l/100 in 2000 and 6.6l/100 in 1995 (source: Ademe, 2011).

Motorists and the car industry are therefore changing, but not always enough to compensate for the increase in the price of petrol, and no doubt with the feeling on the part of private individuals that they have reached the limit of possible efforts.

François Hollande announced in his presidential programme: "I want to make France the nation of environmental excellence. The long-term strategic challenge is to make the increase in fuel costs an accelerator of change, certainly in behaviour and attitudes, but above all an opportunity to develop a sector of excellence in new generation engines, beneficial to private motorists but also to professionals, to exports and to competitiveness as a whole thanks to an exceptional environmental performance. Hybridisation, electric, hydrogen, increased thermal efficiency, new materials... France has all the assets to invent the engines of tomorrow and transform economic and budgetary pressure into energy and ecological change. This evolution is already underway, but it must be chosen.

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