Cross-border shopping for fuel at the France-Germany border

This paper exploits the introduction of the German carbon tax in 2021 as well as excise tax rebates on fuel in France and in Germany, consecutive to the 2022 oil crisis, to infer how fuel tax revenue responds to changes in relative prices. Based on French high-frequency transaction-level data issued from individual banking accounts, we find substantial displacement between foreign and domestic consumption. When relative prices increase by 1%, the relative cross-border demand decreases by 7.8%. Moreover, there is no substantial difference in demand response to either carbon or excise taxes.