The macro decree responding to wartime effects included a direct fuel discount of 20 cents per liter for all consumers. The measure is designed to be quick and broad, aiming to cushion the impact of surging fuel prices for both private drivers and professional fleets, and it was introduced for immediate effect with a plan to generalize the relief to every customer.
In recent weeks, government officials have signaled that the discount could be amended or withdrawn if it proves ineffective. The Bank of Spain has criticized broad, indiscriminate aid, arguing that these 20-cent savings tend to favor higher-income households because they spend more on fuel overall, even if the measure is intended to help the economy and households facing energy shocks. The bank notes in its 2021 Annual Report that such universal support may carry a regressive character since low-income households often consume less fuel.
According to the Bank of Spain, a more selective approach might be preferable, using income-based transfers rather than blanket discounts for all drivers. The report suggests that targeted support would ease demand pressures, reduce bottlenecks, and limit inflationary currents that can be amplified by universal subsidies.
Preliminary estimates from the Bank of Spain indicate that the 20-cent-per-liter cut contributed to a modest slowing of inflation among higher-income households. Between April and June, the impact on low-income households is projected to be smaller but still meaningful. The assessment emphasizes that any temporary energy relief should be quickly deployable with precise targeting to reach the households and businesses most in need, minimizing unintended consequences for the broader economy.
The government remains open to adjustments
Officials argue that, in a context of extreme price volatility, a fast, universal fuel discount was a necessary first step. Yet there is growing consideration of evolving the policy into a more income-responsive form should energy prices remain elevated. Discussions include extending support for gasoline and diesel and expanding coverage to ensure continued relief for drivers who depend on motor fuel.
Teresa Ribera, vice president and minister for Ecological Transition, has floated the possibility of distributing future savings according to household income, pointing to a card-like system that could intensify financial assistance for qualifying families. The aim is to keep essential help available while refining the method of allocation to those who need it most.
The government is absorbing a cost of 20 cents per liter over the three-month period and estimates an impact on the public budget of around 1.423 billion euros. Large fuel retailers with extensive networks have varied the discount between 25 and 30 cents per liter, depending on whether customers are enrolled in loyalty programs or pay through the company’s own payment systems. This variation has drawn scrutiny, highlighting the tension between broad policy measures and the desire for direct, targeted relief.
The blanket 20-cent discount for all customers, regardless of income or usage, has faced criticism for its regressive potential. Economic policymakers have signaled a willingness to reassess the effectiveness of all measures approved under the wartime macro decree and to remove or modify those that do not deliver the intended relief. The objective remains to maintain price stability while ensuring that support reaches those most affected by energy shocks.
There is ongoing vigilance over the fuel market to prevent any pricing behavior by operators that could undermine relief efforts. Authorities stress that monitoring will continue to ensure that price containment goals are not compromised by supplier actions, and that support measures remain aligned with overall macroeconomic stability. This approach reflects a preference for temporary, targeted interventions that can be adjusted as conditions evolve.