By subsidising fuel, they are delaying adjustments in demand
Sleepy protest Photograph: Getty Images
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“T HERE ARE genuine people there with genuine concerns,” said Helen McEntee, Ireland’s defence minister, after the army had been called in to help deal with protesters who had clogged roads with slow-moving convoys and blockaded fuel depots, ports and the country’s only refinery. Their frustration, as in much of Europe, is with fuel prices, which have jumped because of the war in the Gulf.
And the protests are succeeding, with policymakers starting to give in. The Irish government is planning a €500m ($589m) package to cut taxes on fuel, along the lines of similar fuel-tax cuts introduced by Spain and Poland and planned by Germany. Motorists and lorry drivers are not the only beneficiaries. Many of these programmes also include fuel subsidies for farmers and fishermen. The European Commission, meanwhile, is considering loosening its strict state-aid rules to allow a wide range of subsidies.
As the stand-off between America and Iran over the Strait of Hormuz continues, European policymakers are once more under pressure to contain inflation, ease the stress felt by households and businesses, and limit the economic fallout. Christine Lagarde, the president of the European Central Bank, said on April 14th that economic growth in the euro zone is already below the bank’s baseline projection. On the same day, the IMF published lower forecasts projecting growth of just above 1% in the euro zone for this year and next.
Yet the efforts of Europe’s politicians to protect consumers from higher energy prices show they have learned little from the past. For a start, petrol is not particularly expensive. Comparing its price with that of years ago without accounting for overall inflation is a common fallacy. In real terms, which makes prices comparable across time, petrol is about as expensive today as it was on average during the ten years before 2015. In Poland petrol is about 25% cheaper than it was back then. Moreover, the fuel accounts for only about 2% of the overall consumption basket that measures inflation, so there is little economic reason to cap or lower its price.
Chart: The Economist
Diesel, another 2% of the price basket in some countries, is more expensive than the longer-term average (see chart). It also indirectly raises prices of other goods, like food, by increasing logistics or farming costs. That points to a deeper problem for Europe, which makes price caps even worse. Although the continent is a net exporter of petrol (made from mostly-imported crude), it is a net importer of diesel and kerosene. “Europe consumes about 6.6m barrels a day of diesel, and imports about 1.2m of that,” says Michael Connolly of ICIS, a research firm. Half of those imports came from the Middle East. “We are running down inventories, and we haven’t cut the demand yet.” With jet fuel, the situation is similar.
In 2022 Europe was able to redirect liquefied-natural-gas tankers heading from the Gulf to Asia. But with the Gulf closed, there are few tankers at sea to redirect. Moreover, Asia itself cannot come to the rescue because it lacks the crude to fill its own refineries in the first place. As a result, the European “crack spreads” (the price premium over crude oil) on these fuels has ballooned from 60 for diesel and even $100 for jet fuel, according to ICIS. If Gulf supplies are not going to come back soon, European prices will have to climb higher still to force demand down in order to balance it with supply. Yet price caps exacerbate the problems, because they subsidise demand.
Policymakers have other options. Income support for vulnerable households is one. Yet the German government’s plans to allow firms to give employees a tax-free bonus will probably serve the well-off most. Another is the approach of France, which will double state support to €10bn a year to help households and firms to electrify. Such a focus on investment is promising, because capital spending is usually a big casualty of geopolitical and energy shocks.
A study by Dario Caldara of the Federal Reserve and co-authors looking at Russia’s invasion of Ukraine shows that firms with exposure to the conflict reduced investment substantially. The ECB has found that oil shocks depress capital expenditure and R & D investment. Rather than self-defeating price caps, governments should boost investment where they can. ■
논증 분석
유형: diagnosis
핵심 주장
유럽 정치인들이 연료 가격을 보조하는 정책은 수요 조정을 지연시켜 에너지 공급 불균형을 악화시키며, 가격 상한제 대신 취약계층 소득 지원과 전기화 투자 확대가 올바른 처방이다.
논리구조
- 전제: 걸프 전쟁으로 인한 연료 가격 급등에 항의하는 시위가 Ireland, Spain, Poland, Germany 등 유럽 전역에서 발생하고 있으며, 각국 정부는 연료세 인하 및 보조금 패키지로 대응하고 있다.
- 진단: 현재 휘발유 가격은 실질 기준으로 2015년 이전 10년 평균과 비슷한 수준이며, 전체 소비 바스켓에서 차지하는 비중이 약 2%에 불과해 가격 상한제를 도입할 경제적 근거가 미약하다.
- 진단: 디젤과 항공유는 장기 평균 대비 더 비싸고, 유럽은 디젤·등유의 순수입국으로서 Middle East산 수입 물량이 공급 차질을 빚고 있으며 재고는 줄고 수요는 아직 조정되지 않은 더 심각한 구조적 문제를 안고 있다.
- 진단: ICIS에 따르면 유럽의 ‘크랙 스프레드’(원유 대비 가격 프리미엄)가 디젤은 배럴당 100까지 치솟았으며, 걸프 공급이 단기 회복되지 않을 경우 수요를 강제로 줄이기 위해 가격은 더 올라야 한다.
- 반론: 2022년처럼 Middle East발 LNG 탱커를 재배치하는 방식으로 위기를 해소하는 것은 현재 불가능하며, 아시아도 자국 정유소를 채울 원유가 부족해 대안이 되지 못한다.
- 논거: 가격 상한제는 보조금을 통해 수요를 떠받침으로써 공급 부족 문제를 오히려 심화시키는 자기 파괴적 정책이다.
- 처방: 취약계층을 위한 소득 직접 지원이 바람직한 대안이나, Germany의 기업 세금 면제 보너스 계획은 고소득층에게 더 유리하게 작용할 가능성이 높다.
- 처방: France처럼 가계·기업의 전기화를 지원하는 국가 지원을 연간 €100억으로 두 배로 늘리는 투자 중심 접근법이 바람직하다. 에너지·지정학적 충격은 기업 투자를 크게 위축시키기 때문이다.
- 논거: Federal Reserve의 Dario Caldara 연구팀과 ECB 연구에 따르면, 에너지·분쟁 충격은 기업 자본 지출과 R&D 투자를 크게 감소시키므로 정부는 가격 상한제 대신 투자를 촉진해야 한다.
결론
유럽 정부는 연료 가격 보조라는 자기 파괴적 정책 대신 취약계층 소득 지원과 전기화 투자 확대를 통해 에너지 수요를 구조적으로 줄이는 방향으로 전환해야 한다.
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