The Government will withdraw the general aid of 20 cents per liter of fuel

The Government continues to debate the content of the anti-inflation decree that will extend some measures in force, modify others and incorporate a new package.

Thomas Osborne
Thomas Osborne
19 December 2022 Monday 14:31
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The Government will withdraw the general aid of 20 cents per liter of fuel

The Government continues to debate the content of the anti-inflation decree that will extend some measures in force, modify others and incorporate a new package. With ten days to go before December 29, the date on which an extraordinary council of ministers of eminent economic content is expected, there are only two certainties: that transport in Cercanías, Rodalies and Media Distancia will continue to be free, and that the bonus of 20 cents per liter of fuel will disappear in general for all drivers as of January 1. This was confirmed this Monday by the Secretary of State for the Economy, Gonzalo García Andrés.

"It has been a very effective measure", activated at the end of March to deal with the increase in prices, but which was defined as "temporary", has exposed the number two of Nadia Calviño in an act organized by Funcas. "Now it must adapt and withdraw in general terms, with accompanying measures for the sectors that are most affected," she added. Until now, the First Vice President and the Minister of Finance, María Jesús Montero, had spoken that they were studying modifying the aid when going to the service station.

"It is time to gradually adapt this response" to the costs of the war, García Andrés confirmed, stating that the "temporary measures must be gradually withdrawn" because "the general budget cannot be permanently charged".

The decision, therefore, is taken at a time when the evolution of prices is being more moderate. The Government must define before the end of the year what it considers to be the sectors most affected by the increase in prices, what type of discount it maintains and whether it extends aid to vulnerable groups of the population. In France, the Macron government has decided to give a 100-euro fuel check to workers who use a vehicle to work and have an income of less than 2,000 euros a month.

The Government assumes, and this has been explained by the Secretary of State for the Economy, that the decision "will have an effect" on inflation. The measure, in effect, has been key to lowering inflation, but the fiscal cost is high: it is around 5,700 million a year. "To evaluate the measures, we take into account the effect of inflation when we propose them and when they are withdrawn," García Andrés concluded.

At this time, the price of gasoline is around 1.58 euros per liter while that of diesel is 1.66 euros per liter, before applying the 20 cent discount that some companies extend. The evolution of the price of a barrel of oil is positive and that was one of the variables that Economics was going to study.

One of the problems that the global rebate on fuels has had is that the highest incomes have benefited more from it, instead of the lowest, because they are the ones who use the private vehicle the most. The humblest use, on average, other types of transport. The cost of this aid is concentrated, therefore, in the highest sections, which accumulate 38% of the distribution. The most modest rents add up, on the other hand, half, 20% of the cost.