Are fuel tax cuts the solution? Government intervention is an explosive topic.
A liter of gasoline currently costs over 2.20 francs. It hurts some drivers. But of course, the price doesn’t hurt so much that drivers in Switzerland would change their driving behavior.
The decrease in fuel consumption from January to April 2022 is not noticeable – although prices at the dispenser have increased significantly during this period. Consumption is roughly at pre-krone level – with the exception of aviation fuel, writes the fuel importer association Avenergy Suisse.
Extraordinary session of the Council of States
Open the box. Close the box
In view of rising fuel prices, the Council of State debated “aid measures for the benefit of the population and the economy”. SVP wanted to cut gasoline and diesel prices, making some progress during the extraordinary session early in the third week of trading. However, all proposals were rejected. Now it is up to the National Council.
Even before fuel prices rose, the Swiss paid less attention to fuel consumption when buying a car than in neighboring countries. Compared to Europe, the new cars purchased by the Swiss in 2020 consume significantly more. This is evidenced by the fuel emissions of new cars.
The reason is probably because many people in this country can afford expensive fuel efficient cars. An average household in Switzerland uses 84 liters of fuel per month. However, consumption is highly dependent on income. Low-income households use less fuel than high-income households.
A reduction in taxes on fuel would benefit everyone – including many drivers in Switzerland who have not changed their driving style in the past, neither when purchasing the car, nor now. The Greens argue that the rich would benefit the most from a nationwide cut.
SVP wants to start with taxes
One of the postulates of the SVP is to suspend the tax on mineral oils. The result would be a loss of government revenue in the millions or even billions, depending on the extent of the intervention.
Another SVP proposal is to exempt drivers from VAT. It is levied on the entire price of gasoline, i.e. the tax on mineral oils included in the price of gasoline. The state should not be allowed to re-tax taxes, argues the SVP. This initiative has already been approved by the National Council.
More kilometers traveled in free time
And those who need a car to work where there is no public transport? Here, too, SVP has a ready-made proposal: people commuting to work by car should be able to deduct larger tax deductions.
The fact is that most of the kilometers traveled by car in this country is spent on leisure time and less on commuting.
If the state is to intervene, more targeted measures are needed than general cuts in fuel prices. The Federal Council has therefore set up a working group. This should keep everything in mind – because not only fuel and heating oil are more expensive, but overall inflation is a burden for households. Finally, electricity prices are likely to rise soon.
Action is needed to benefit those for whom rising prices are a problem.