Posted Nov 16, 2022, 6:00 a.m.Updated Nov. 16, 2022, 9:22 a.m.
While in France the discount of 30 euro cents per liter of fuel financed by the State since 1is September will drop from this Wednesday and will be replaced in 2023 by more targeted aid, an overview of the systems put in place in neighboring countries to deal with the fuel surge:
· Germany
The rebate at the pump introduced by the German government between 1is June and August 31 reduced the tax burden on petrol by 34 cents and that on diesel by 17 cents. At 1is September, the national average price of gasoline rose from 1.85 to 2.08 euros/litre compared to August 31, and that of diesel from 2.09 to 2.18 euros/litre.
Was this fall in the summer actually passed on by oil companies to consumers? The analysis is made difficult by shortages and logistical problems, linked for example to the drop in the level of the Rhine which has increased the cost of transport, notes the president of the German Competition Office, Andreas Mundt. In the meantime, the rebate at the pump will have cost the federal state around 3.2 billion euros, according to the IFO.
A much more targeted measure, the increase of 3 cents per kilometer in the flat-rate allowance for long-distance commuters, has had more impact by costing less: 310 million euros in 2022, estimate economists from the ‘I FO. The powerful association of German motorists, Adac, therefore pleads for a lump sum compensation of 38 cents from the first kilometer, rather than a discount for all motorists.
· UK
The government has granted a tax rebate of 5 pence per liter at the pump. This boost dates back to March, when Rishi Sunak was still finance minister, and was part of a vast household aid plan. On this occasion, taxes on petrol and diesel increased from 57.95 to 52.95 pence per litre. This reduction is planned for a period of twelve months, i.e. until the end of March 2023. Its total cost is estimated at 5 billion pounds over one year.
The question is whether the government will manage to remove this discount when it expires, if energy prices remain at a high level. Experience shows that these temporary aids often end up being maintained over time. This is the case with the fuel tax freeze (instead of an increase in line with inflation): introduced in 2011, this freeze is still in effect.
· Belgium
While inflation in Belgium is much higher than the euro zone average (12.3% over one year in October), the federal government decided in March to lower taxes on petrol and diesel. The system provides for sale price ceilings for each type of fuel. It also includes a so-called “positive ratchet” system: if prices fall on the international market and cause a drop in price ceilings, then the excise rate rises, for an amount corresponding to half of the drop in prices.
These rules apply at least until the end of the year. Less generous than the measures taken in France from 1is September, they led many Belgians to refuel in France at the start of the school year, before fuel shortages in France reversed the flow a few weeks later.
Spain
Madrid has been running since 1is April a general reduction in the price of fuel, with a reduction at the pump of 20 centimes per liter, of which 15 centimes financed by the State and 5 centimes paid by the oil companies. Initially scheduled to last three months, the measure has been extended, but should end on December 31.
The government is currently studying more targeted aid, oriented towards the transport sector and the activities most dependent on the price of fuel, as well as towards the most vulnerable populations. “The grant was an emergency decision. Skyrocketing fuel prices have prompted a quick, widespread and easy-to-apply response, but it is increasingly important to focus the effort on those who need it most, whether for professional reasons or family income,” explained the Minister for the Ecological Transition, Teresa Ribera.
The total cost of the discount applied to all is estimated at 4.3 billion euros in 2022, according to a study by the Fedea economic study foundation. In addition to the 5-cent discount, the major oil companies offered the possibility of accumulating other discounts through loyalty programs or the use of their credit cards, which in total allowed savings of up to at 40 to 50 cents per liter.
· Italy
Introduced in March, the reduction in excise duty of 30 cents per liter of fuel has been extended several times in Italy. It will be effective until at least December 31. This represents a cost of 5.1 billion euros for public finances. Employees in the private sector will also be able to benefit from a fuel bonus of 200 euros for the year 2022 which they will be able to receive until January 12.
· Netherlands
The Netherlands has reduced excise duties on petrol, diesel and LPG until the end of 2022. The reduction is 17.3 cents per liter for unleaded petrol, 11.1 cents for diesel and 4.1 cents for LPG.
This week, The Hague decided to extend this measure until 1is July 2023. Although excise duties are indexed at 6 cents per liter from 1is January 2023, they will not yet be passed on to consumers.
The cost to taxpayers of this year’s measures is estimated at more than 1 billion euros. For the extension until next summer, the State allocates 1.2 billion euros.
Ingrid Feuerstein, Nathalie Steiwer, Karl de Meyer, Cécile Thibaud, Olivier Tosseri and Stefan de Vries (Our correspondents in Berlin, London, Brussels, Madrid, Rome and Amsterdam.)