French President Emmanuel Macron has scrapped planned fuel hikes following weeks of protests across the country.
The country’s Prime Minister Edouard Philippe confirmed that the tax is no longer included in the 2019 budget.
Mr Macron had planned to raise taxes on diesel and gasoline under plans to try and wean the country off fossil fuels and cut pollution.
However protesters took to the streets as part of the “yellow vests” protests.
They began on November 17 over the planned fuel hikes however by the time Mr Macron chose to reverse his plans, demonstrators were now demanding much more.
Workers said they were angry about low wages, high taxes and high unemployment.
On Tuesday, the government agreed to suspend the fuel tax rise for six months. But instead of appeasing the protesters, it spurred other groups to join in, hoping for concessions of their own. The protests took on an even bigger dimension on Wednesday with trade unions and farmers vowing to join the fray.
So after nightfall, as parliament debated the 2019 budget, Macron's government suddenly gave in.
"I have no problem with admitting that on such or such question we could have done differently, that if there is such a level of anger ... it's because we still have a lot of things to improve," the prime minister told legislators.
Philippe said "the tax is now abandoned" in the 2019 budget, and the government is "ready for dialogue."
The budget can be renegotiated through the year, but given the scale of the recent protests, Macron is unlikely to revive the added fuel tax idea anytime soon.
Jacline Mouraud, one of the self-proclaimed spokespeople for the disparate yellow vest movement, said that Macron's concession "comes much too late, unfortunately."
"It's on the right path, but in my opinion it will not fundamentally change the movement," she said.
Four people died in the protests with hundreds injured.
Last weekend, Paris saw the worst anti-government riots in fifty years.
Macron's popularity has slumped to a new low since the demonstrations began. The former investment banker, who has pushed pro-business economic reforms to make France more competitive globally, is accused of being the "president of the rich" and of being estranged from the working classes.
On Wednesday, France's largest farmers' union said it will launch anti-government protests next week, after trucking unions called for a rolling strike.
Another yellow vest demonstration is planned for Saturday in Paris.
Additional reporting by AP.
