Oil companies earned an additional 723 million in fuel bonuses, according to the study

Fill the tank petrol of 55 liters cost 89.6 euros a year ago. About 83.7 euros for diesel. A war has just broken out in Ukraine. He started a rally that pushed fuel price up to 2 euros per liter at some gas stations.

Many explanations have been given for its insane price increase: the limitation of Russian supply, problems in the processing of crude oil, shortage of diesel and reduced capacities to increase production Oilamong others.

The Spanish government was forced to intervene. He did this by introducing 20 cents bonus per liter of fuel which entered into force on April 1, 2022. Due to the urgency, the support could not be limited to the lowest incomes. It was extended to all consumers, forcing gas stations to pay money in advance, applying discounts directly at the cash register.

At that time, some voices criticizing the measure, such as Gesto, had already appeared. State Treasury technicians warn that this measure will not discourage consumption or be particularly fair, as the public subsidy will benefit high-income earners, who have no problems paying their bills and usually have vehicles that consume more.

Another perverse effect was also highlighted: partial absorption of aid by oil companies. Doubts spread with the speed of price increases at the pumps. Despite the fact that they grew faster than crude oil prices on the international market, the National Commission for Markets and Market Competition (CNMC) found no evidence that companies were inflating prices to get some of the support: “In general, the fuel distribution market through gas stations seems to pass the bonus on to the consumer,” the agency explained on July 7, 2022.

However, a year after the start of the war, the study shows that the oil companies would have cashed in on this subsidy. According to economists Juan Luis Jiménez, Jordi Perdiguero and José Manuel Cazorla-Artiles, 17% of the cost of the measure went to the company’s profit and loss accountwhich would pocket an additional 723 million euros.

With the increase in prices, the collection through VAT, with which the state achieved an additional income of 202 million euros. Thus, 4.8 percent of subsidies remained in the public treasury.

Those who lost were the consumers, who would bear an additional cost of 925 million euros due to the price increase unduly From the prices.

Diesel is 6 lipa more expensive

“This policy had advantages and disadvantages,” admit the authors. The rebate helped lower the consumer price index by a few tenths (CPI) and increased public revenues, but “could have generated higher consumption and thus higher pollution”, they point out. In addition, “higher incomes benefited more in a country where 73% of the poorest households do not consume fuel”.

Another consequence that was observed after the launch of the bonus is that From April to December 2022, consumers paid almost 6 lipa more for a liter of diesel “due to subsidies”say the experts, who made the price comparison from sources and taking as a reference a group of European countries where there was no assistance for fuel consumption.

The total cost of the state subsidy was about 5,000 million euros, although estimates by economists, who used data on consumption at Spanish gas stations, were about 4,233 million. “This is a measure that, although it may be partially effective in curbing the CPI, has a significant economic cost and a non-trivial redistributive effect. With regard to future policies, it would be necessary to evaluate alternative mechanisms, equally or more effective, which have a lower cost to society and efficiency in the use of public money”, they recommend.