France Unveils $512 Million Aid Package as Energy Prices Crush Small Businesses
France has rolled out an estimated 450 million euro ($512 million) aid package to help households and businesses cope with soaring fuel and heating costs, with rural areas hit hardest by the energy crisis.
France has announced a new aid package worth an estimated 450 million euros, or roughly $512 million, to help households and businesses struggling with soaring energy prices. The package includes subsidies for commuters who travel at least 15 kilometers to work and direct support ranging from 48 euros to 277 euros for 5.8 million families facing high winter energy bills.
The measures come as fuel prices spike across Europe in the wake of the Iran war that began on Feb. 28, dealing a heavy blow to small businesses, particularly in rural areas where car travel is essential and public transportation is limited. Rural communities are home to about 21 million people, roughly a third of France's population, and rural areas make up nearly 90% of the country's territory.
For Kevin and Sandrine Luce, who run a bakery in Saint-Just-en-Chaussée, a small town about 90 kilometers north of Paris, the crisis is measured in every batch of baguettes. When they opened in March, they paid 2,230 euros for 2,000 liters of heating oil for their oven. Last week, they spent almost the same amount on just 1,200 liters. «Originally, it was a good deal, because initially, a fuel-heated oven is more economical than an electric one,» Kevin Luce said. «That is until the price increased by 50%. So, yes, now it's not a good deal.»
The Luces are not alone. France has more than 34,000 bakers producing around 6 billion baguettes each year, and the national federation of bakeries and patisseries estimates that about a quarter of them use oil- or gas-fired ovens. Luce said the extra energy spending represents lost earnings that could have gone to salaries, employee raises, or investments.
The pain extends beyond the bakery. Martial Realland, who sold his home to buy a food truck that he drives from village to village in the l'Oise region of northern France, said filling his truck with diesel now costs 200 euros, compared to 120 euros before the Iran war. «It really hurts,» he said. «It's catastrophic.» With winter approaching, he is bracing for a heating bill that could reach 2,500 euros to fill his 1,500-liter tank, up from 1,600 euros last year. He may not fill it at all, and he is already turning down work that requires long drives because the fuel costs would not make it worthwhile.
The political stakes are high. The so-called yellow vest protest movement, which rocked President Emmanuel Macron's government during his first term, had deep roots in rural towns and villages, and fuel prices were one of the triggers of that anger. The memory hangs over Macron's ministers as they confront renewed frustration over soaring costs.
Christine Loir, a lawmaker from the National Rally party of far-right presidential hopeful Marine Le Pen, said more than 10% of homes in L'Eure, the Normandy region she represents in the National Assembly, use heating oil. She said many residents cannot afford to install other heating systems or better insulate their homes, and she is lobbying the government to lower taxes on heating oil, which is more commonly used in rural areas by households and enterprises alike. «People are extremely worried,» Loir said. «People say that if fuel prices don't come down, they'll stop going to work, they can't cope.» Some constituents have told her they will have to choose between heating and food this winter.
Despite the pressure, the Luces are holding the line on prices for their customers. A basic baguette still costs 1 euro, and a traditional baguette 1.10 euros. «I won't change my price,» Kevin Luce said. «It wouldn't be of any help. It wouldn't soak up the lost revenue and it would be counterproductive, because our customers would feel betrayed. They shouldn't have to pay more. They're already paying enough at home.»
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