Negotiating with the protesters, named for wearing high-visibility yellow vests "gilets jaunes" has been hard for the government as the leaderless activists are spread throughout rural and urban France and include people with grievances beyond objections to the fuel duty.
The "gilets jaunes" movement began as a protest against a rise in duties on diesel, which is widely used by French motorists and has always been less heavily taxed than other types of fuel. Why do so many people support the protest despite incidents of rioting and vandalism?
Philippe held crisis talks with representatives of major political parties on Monday, and met with Macron, who cancelled a two-day trip to Serbia amid the most serious challenge to his presidency since his election in May 2017.
French President Emmanuel Macron has scrapped a fuel tax rise amid fears of new violence, after weeks of nationwide protests and the worst rioting in Paris in decades.
Yet many others said they had no intention of stopping the demonstrations.
Macron, whose approval ratings have plummeted to just 23 percent, is yet to comment publicly since returning to France from a G20 summit in Argentina on Sunday morning.
The price increases for the utilities will be suspended for six months, said Prime Minister Edouard Philippe, but leaders of the demonstrations in which hundreds of thousands have donned yellow safety vests were dismissive of the gesture.
Minister Francois de Rugy told BFM TV that the government had made a decision to ditch the plans in their entirety in order to assuage fears that the increase would be be reintroduced as soon as the protests came to an end.
He also froze increases in regulated electricity and gas prices and new vehicle norms which would have hit users of old, polluting diesel cars - a battery of announcements targeted at low-income families.
The "yellow vest" movement, named after the high-visibility jackets worn by supporters, emerged on social media in October after months of swelling anger over rising fuel prices.
But that policy, along with various comments deemed insensitive to ordinary workers, has prompted numerous ex-banker's critics to label him a "president of the rich".
"The government is ready for dialogue and is showing it because this tax increase has been dropped from the 2019 budget bill".
"If the review shows that not enough capital is be re-injected in the French economy, I will propose re-establishing the ISF", Equality Minister Marlene Schiappa said in a statement Wednesday.
Labour Minister Muriel Penicaud warned against creating "chaos" which would "do nothing to resolve the problems" of workers.
But experts say the government may have reacted too late to the street protests, a regular feature of French political life which have repeatedly forced Macron's predecessors into U-turns. People want "the baguette", not crumbs, and will take to the streets again on Saturday, he said. Some 4,500 police officers were deployed to deal with about 10,000 protesters in Paris alone.
Students opposed to a university application system remained mobilized, trucking unions called for a rolling strike and France's largest farm union threatened to launch protests next week.