Thursday, December 7

The Government will maintain the subsidy for diesel and gasoline. Not encouraging news

The Government has confirmed that it will extend the aid for diesel and gasoline, although without a specific date. This has been confirmed by María Jesús Montero, Minister of Finance and Public Administration, in an interview on the program Four a day. This possibility was already on the table despite the fact that the Government had been reluctant. And it’s not good news.

The 20 cents/liter. On April 1st, a government subsidy of 20 cents/liter came into effect for the price of all fuels. This measure was taken to help drivers in the significant rise in prices that diesel, gasoline and LPG had suffered in recent months, a consequence to a large extent of the War in Ukraine.

When the Government took sides, the carriers had pressed with a strike that left us with images of shortages in some businesses and neighboring countries such as France had also opted for a similar measure. In that case, 15 cents/litre.

The doubts. This aid for the purchase of fuel had an end date of June 30. Two months later, not only are we paying for gasoline at the same price as when the subsidy began, we are paying more, with gasoline and diesel prices at historical records. Today, gasoline 95 is priced at €2,017/l and diesel A at €1,885/l. For gasoline it is a historical price. Diesel is just three cents from its ceiling.

As a consequence, drivers in many parts of Spain are paying more money than before the subsidy, even applying it. From the Government they have pointed out the service stations on more than one occasion, even threatening to withdraw the aid. However, Pedro Sánchez, first, and María Jesús Montero, later, have confirmed that it will continue.

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no specific date. “We are open to the extension of the decree law beyond June 30. The nature of three months corresponded to the uncertainty of the evolution of the war. There will be an answer before June 30,” Pedro Sánchez said yesterday in Brussels.

“The Government is obliged to accompany families and companies with measures that will have to be extended while the effects of the war in Ukraine last, which, as they have seen today in the European Council, are even considering a toughening so that definitively we can dissuade Putin”, answered María Jesús Montero in Four a day.

Guide not to go crazy with the price of gasoline: how help works and where to refuel cheaper

And now that? The extension of subsidies for fuel aid poses exactly the same problem as it did just two months ago. Until when will the Government subsidize the purchase of diesel and gasoline? How long can we say that the effects of the Ukraine War will last?

Everything indicates that the steps that have been taken in recent months are leading us to a new normality in fuel prices. Removing Russian oil from the European market, as it is very close to happening, will only further stress a trade that sees how the Brent Barrel has settled above the 110 euro barrier (with a maximum yesterday of 125 euros/barrel) and countries and providers desperately seeking new sources of revenue.

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