New open debate in the Government. This time on account of the discount of 20 cents on fuel in force until June 30, which President Pedro Sánchez announced would be extended for three more months. The Minister of Consumer Affairs, Alberto Garzonopened this Tuesday the door to introduce a greater progressivity in the bonus so that the measure is “more effective” and reaches those who “truly & rdquor; they need it and not the entire population, but the head of the Treasury, Maria Jesus Monterocooled down this possibility a few hours later by stating that the current decree law already includes specific measures for most vulnerable consumers.
“The decree law already contemplated special attention to those people who have less income. It seems convenient that the middle class of our country, which is the one that proportionally plus taxes payalso benefits from the drop in electricity and the fuel bonus”, Montero said in an interview on Antena 3. However, the minister herself defended a few weeks ago that “if the situation (of energy crisis) continues for a long time ), the measure should be more selective depending on the needs” of the beneficiaries and there are many economists who also disagree with this measure.
High incomes, the most benefited
The Bank of Spain warned in its 2021 annual report that the fuel subsidy is “a very generic measure, which may even have a regressive character, given that the households of lower rents they probably have a lower consumption of those products” and proposed as a solution to use “transfers conditioned to the level of income & rdquor ;. Along the same lines, this Tuesday during the annual meeting of the gas employers Sedigasthe director of the International Situation and Analysis of Funcas, Raymond Torres, assured that many countries have introduced similar measures to “avoid a ‘yellow vest’ effect” but “an element of connection between countries” is lacking. Torres even warned, before the Prime Minister announced his extension, that “if it is maintained over time (the discount of 20 cents) it would be counterproductive & rdquor; and he advocated measures “more focused on vulnerable groups and sectors”.
“I understand that for practical reasons it has been done this way, but that imposes a very high cost to the public coffers in a situation of high public spending and of reduced tax margin”, explained during the annual meeting of Sedigas the senior economist of the Bank of Spain, Marta Suarez-Varela. The Ministry of Finance initially calculated that the cost of this discount would be 1,423 million euros in the three months that were initially established for the measure to be in force, although a few weeks ago the Minister of Finance, Maria Jesus Monteroraised this figure to a range between 1,700 and 2,000 million euros. Now, with the extension of the measure until September 30, if it remains in the same terms, public spending will double.
the annual report Economic and Social Council of Spain (CES), published this Wednesday, insists that the discount “has been ineffective in his goal of Price reductionin addition to being a regressive fiscal measure that collides with the goal of decarbonising the economy”. The average price of gasoline has continued its climb to 1,968 euros per liter this week, according to data from the Oil Bulletin of the European Union. That is five cents less than in the last week of March, before the Government launched the discount, with which the rise in gasoline prices has already absorbed 75% of the aid. The case of diesel is different because the average price per liter has returned to get cheaper for the third consecutive week, with a decrease of 0.8%, to stand at 1,852 euros. In this way, when applying the reduction of 20 cents, its amount would be 18.5 cents less than at the end of March.