Prices will fall today by up to six euro cents per litre for the next three months, with the government and industry each bearing half of the burden.
The government will see its revenues hit by roughly €300m (£238m), described by Moscovici as “extremely substantial”.
But he defended the move, arguing “it will cost €1.50 less to put 25 litres in the fuel tank. It is a substantial amount, especially for people with low revenues or who have to drive a lot.”
Before his election in May, socialist President Hollande vowed to freeze rising fuel prices for three months, despite the government struggling to cut its budget deficit to three per cent of GDP this year.
Recent polls have shown Hollande’s popularity falling – and rising prices are frequently cited as a major concern for voters.
Meanwhile politicians are gearing up to debate the 75p top tax rate, which formed another key plank of Hollande’s election bid.