Price controls against rising energy prices?
The US-Israeli war against Iran – and the ongoing blockade of the Strait of Hormuz – have caused energy prices to soar. Measures to curb petrol prices are being implemented or discussed in several EU countries. Europe's press takes stock of the situation – with a sense of déjà vu.
Easter populism for the Poles
The Polish government's decision to counter rising energy prices by lowering taxes irks Interia:
“Donald Tusk's calculation is simple: the people should not be out on their Easter stroll complaining that the government is not doing anything. Instead of curbing demand for petrol and preparing for truly difficult times, the prime minister is currying favour with the voters, taking a leaf straight out of the PiS [the previous government] playbook. ... Prices will rise anyway if the price of oil on the world markets skyrockets. The budget deficit is reaching record levels. The prospect of a rapid return to relative normality on the fuel market is uncertain. The government should reserve its policy tools for truly difficult times.”
Lithuania must follow suit
If neighbouring countries Poland and Latvia subsidise petrol prices, Lithuania must follow suit, argues economist Algirdas Bartkus in Lrytas:
“Lower excise duties would remove the incentive to fill up with fuel in neighbouring countries, thereby reducing the environmental impact of journeys to Latvia and Poland. ... Whilst the incentive for fuel-efficient driving would fall slightly and local traffic volumes would rise somewhat, this would be offset by two factors: firstly, excise duties would be levied in Lithuania rather than in Latvia or Poland; secondly, the pointless environmental damage caused by 'fuel tourism' would be eliminated. Since Poland and Latvia are lowering their fuel prices, it is becoming increasingly important for Lithuania to do the same.”
Price caps only make matters worse
The Financial Times warns against state intervention on prices:
“Efforts to rein in market prices are a quick and visible way for politicians to display support for stretched households. But they are a misguided policy measure. Although it provides near-term relief, fiddling with price signals often creates new problems by dulling important incentives for buyers and sellers. In some European cities, for instance, rent controls have weakened financial motives for landlords and developers and led to deeper housing shortages.”
Speed limit: a win win win
De Standaard urges its government to learn from mistakes made in previous energy crises:
“One of these is that many consumers back then were overcompensated. ... A second lesson is that the government's financial situation does not allow for such measures. ... A third lesson is that we have to cut our dependence on fossil fuels. ... This is also the line taken by the EU Commission. The general consensus is that rather than squandering taxpayers' money, European governments should lower the speed limit. This will benefit not only car drivers' wallets, but also energy independence and the climate to boot.”