The Executive plans to eliminate as of January 1 the general reduction of 20 cents in the price of fuel and limit it to certain professional sectors
From April 1 to the end of the year, all drivers, professional or not, will have benefited from the 20 cent discount on the price of gasoline decreed by the Government. A measure that sought to relieve the pocket of citizens and contain the inflationary spiral. But that will not have a tour beyond January 1. Or at least, as it is raised now.
The Executive has not made a decision on the matter, but in successive statements different ministers and secretaries of State have dropped that, if extended, the discounts will only benefit certain professional groups. For example, those of transport, livestock, agriculture or fishing. “It has been a very effective measure (…) Now it must adapt and withdraw in general terms, with accompanying measures for the sectors that are most affected,” First Vice President Nadia Calviño declared last Monday at an event organized by Funcas.
The Government considers that the reduction in the price of fuels has helped to contain inflation, which in the last two months has moderated compared to the previous ones. Of course, with a fiscal cost that is close to 5,700 million euros. When the measure was launched on April 1, the Executive’s idea was to maintain it only until June 30. But five days before that date – and with a liter of fuel still above two euros – the Council of Ministers decided to extend the discounts until December 31.
Some of the main oil companies that operate in Spain decided from the outset to offer additional discounts to the 20 cents from the Government. For example, Repsol reduced the price of gasoline by five cents for all users, and 10 cents for Waylet customers (the company’s app that gives access to services and discounts). For its part, Cepsa also established a general discount of 25 cents, and 30 for customers of the ‘Because YOU Vuelves’ loyalty programme. Both companies maintain these discounts today.
The solution, on December 29
The Government has been carefully following the evolution of energy prices these weeks and more specifically, of the Brent barrel of oil to decide whether to maintain the bonus and on what terms.
The solution will not arrive until the Council of Ministers on December 29. Most likely, the Executive will compensate for the withdrawal of the general discount on gasoline with a new aid package to cushion the impact of inflation that, despite having moderated, continues to be at very high levels for too many households.
The most probable options consist of aid so that the most vulnerable families can cover the daily shopping basket, as well as a VAT reduction on some foods. In the case of the tax, it will not be a general reduction, but some consumer goods such as fish, which is now taxed with a VAT of 10% and could drop to 4%. Currently, the maximum rate of tax (21%) is applied to certain products related to food, such as soft drinks or juices. Fish, pasta, yogurt, oils or coffee bear a VAT of 10%, while the most basic products (eggs, vegetables, fruit, bread or milk) are taxed with a minimum of 4%.