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Oil Shock Lifts Inflation as France’s Fuel Taxes Fall and Trump Pushes a Gas-Tax Pause

A sustained oil shock is lifting prices, squeezing budgets, pressuring households.

Overview

  • France’s prime minister said Tuesday that fuel-tax receipts fell by about €300 million over the first ten days of May as consumption dropped 30%, wiping out a small March–April surplus and leaving revenue since March 1 €105 million below last year.
  • U.S. consumer inflation rose to 3.8% year over year in April, the highest in nearly three years, with gasoline up sharply as average pump prices hover near $4.50 a gallon compared with about $3 before the war.
  • President Donald Trump said Monday he wants to suspend the federal gasoline tax — 18.4 cents per gallon — to ease costs for drivers, a step that needs approval from Congress and that some Republican lawmakers moved to introduce.
  • Crude stays above $100 a barrel and stocks slipped Tuesday on renewed inflation worries, while European markets looked set for a modest rebound Wednesday even as oil remained elevated.
  • France’s inflation rate was confirmed at 2.2% in April, driven by a 14.3% jump in energy, and households are cutting driving, shifting to public transport and telework, with train bookings up 14% in recent weeks and officials warning of pressure on growth and the deficit.