Keeping oil prices low would cause enormous environmental and economic damage, while also failing to provide any meaningful help to the poor.
total 18 EU countries cut transport fuel taxes Or price caps on fuel, both of which some countries have adopted in response to the energy crisis.
The Hungarian government has fixed the consumer price of petrol and diesel at HUF 480 or around EUR 1.2 from November 2021, while market prices have been much higher and even Over 800 HUF, For example. The government reduced the fuel excise tax by 25 forints, or 0.06 euros before that.
hiking
I have at least 42 arguments for why government intervention to artificially lower fuel prices is the wrong response. The main problem is that reducing fuel prices increases fuel consumption.
According to the European Environment Agency, EU average fuel prices up 1% It can reduce fuel consumption by 0.1% in the short term and 0.3% in the long term.It is estimated that the fuel tax cuts announced so far in the EU will result in An additional 3.3 megatons of oil are consumed.
The case of Hungary also demonstrates the impact of lower prices on fuel consumption: in the first eight months of 2022, Hungary Consumes 14% more transportation fuel Compared with the same period last year, although the prices of other products, especially food, have decreased Dramatic increaselimiting household disposable income.
The traffic boosting effect of price monopoly is also reflected in the following facts: Merchants start restricting Use of company cars in July 2022, when company cars are prohibited from purchasing fixed-price fuel.In Slovakia, a poll It found that 30% of the population had driven less since the fuel price increase, and nearly 6% of respondents said they had switched partially or fully to public transport due to the sudden price increase.
