The gasoline and diesel subsidy has some clear beneficiaries: the highest incomes

The last European report in which the costs of fuels are collected has estimated in €1,749/litre the gasoline price and at €1,906/litre for diesel. does exactly one yeargasoline stood at €1,437/litre on average and diesel at €1,280/litre. in 2019the costs were €1,318/litre and €1,226/litre.

At the first prices, however, it is necessary to discount the 20 cents/liter of state aid that have been applied since last April 1 and that will be extended, at least, until next December 31. A grant that has been applied in other european countries and that has not ceased to be a patch in the face of the historic rise in fuel prices.

And it is that state aid has not served to bear the higher cost of diesel and gasoline, has only alleviated the checkout of consumers. Some consumers who, however, have not benefited equally from this subsidy. The richest are the ones who are enjoying it the most.

More expensive fuel and lower consumption

During the extension of the aforementioned subsidy, the government was divided between those who defended a universal aid in the price of gasoline and those who claimed to benefit to a greater extent the lower rents. In this last bank was Yolanda Díaz (Minister of Labor and Social Economy since January 2020 and second vice president), Alberto Garzón (Minister of Consumption) or Teresa Ribera (minister for the Ecological Transition and the Demographic Challenge and third vice president).

Among the arguments put forward: a universal subsidy only benefits those who can assume greater spending and does not reduce the consumption of fossil fuels, so it would not be a clean and environmentally friendly measure either.

During this time, Caixabank has prepared two interesting reports on fuel consumption. In the firstwhich collected data up to March 2022 (just before the subsidy came into play) showed that those who spent the least on gasoline and diesel had hardly increased their spending, while it had skyrocketed among the half that spent the most money on fuels.

In March, consumers who spent the least on fuel had seen their monthly bill rise by 2.3%, while those who spent the most had needed 32% more money at the end of the month to cover their needs, compared to same period of 2019.

Since the entry into force of the subsidy, prices have only increased, with government threat service stations that he could withdraw the aid if he found that the costs were being artificially inflating.

And the passing of the months has only confirmed that the drivers who spent the least on fuel are the same ones who have advocated the most for restrict its use. The decile that spent the least on this good spent 20.7% less in July than in the same month of 2019, so it moderated (and much) its consumption.

However, as we increase the volume of the average ticket, the overrun at the end of the month. Thus, buyers who spend the most at the end of the month on diesel and gasoline are spending 25.7% more money on their monthly bill than in 2019. Applying the subsidy, prices at checkout have increased by 32 .2%, so that all deciles, even those that spend the most, are consuming fewer liters of fuel.

The problem is the real cost

The problem is that previous Caixabank studies refer to the volume of spending and not to the household income. As specified in the same report, those who spend the most money on transport may do so because their capacity to absorb the increase in price is greater, but also because have no other alternative to the daily use of the private vehicle.

It is one of the problems that the critical sector of the Government pointed to with the extension of aid for the purchase of fuel: the lowest incomes without an alternative to the car will see their family economy much more pressured than the high incomes.

The highest rents they spend more money on fuel, each month, than low incomes. It is not only that they have vehicles that consume more, they also have a greater number of vehicles per household, which triggers their spending. They are conclusions made by the European Commission in 2020.

In addition, the data for Barcelona and Madrid collected by show that high incomes use private vehicles much more than low incomes. In Pozuelo de Alarcón, one of the richest municipalities in Spain, 62% of journeys are made by car. In Parla, at the opposite extreme, the private vehicle is used in 41% of the trips. In the average term, the exception is Alcalá de Henares where only 14% of trips are made by car. In Leganés and Alcorcón, this percentage rises to 36 and 35%, respectively.

However, they are the medium and low income the ones that suffer the most from the increase in fuels, since they are the ones that dedicate the highest percentage of their monthly budget to it. The European Comission threw another piece of information: the medium and low incomes are the ones that, percentage-wise, spend more money from their budget on electricity, on heating their home and, of course, on fuel.

The general picture says, therefore, that the consumption in liters has been contained but that not all drivers have done so to the same extent. Those who already spent little on this good are the ones who have made the most adjustments and those who have drastically reduced their consumption. But, also, that those who have no alternative to the use of a private vehicle and their incomes are lower, have seen their economies pressured like never before.

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