A Fuel Subsidy Worth Hundreds of Millions Would Deepen Import Dependency

Prices at the pump for petrol and diesel have risen sharply, and it shows in many Finns’ everyday lives. In response, the Swedish People’s Party has proposed halving the VAT on fuel, and the Finns Party a cut to the distribution obligation.

Both measures would cost the state hundreds of millions of euros. A tax cut cuts straight into tax revenue, while a lower distribution obligation would make it harder to stay on track with emissions targets, forcing us to buy emissions units from other EU countries at a high price or to take considerably more expensive measures instead.

If that much money is available to bring prices down, it should be spent as wisely as possible.

Why Is Cutting Fuel Prices the Wrong Fix?

The concern behind the Swedish People’s Party’s proposal is understandable. In the countryside and the archipelago, many people have no option but the car. But directing support toward buying fuel is still an economically and ecologically backwards solution.

Dependence on imported energy is already a threat to our self-sufficiency and security, since it turns us into pawns of oil-producing authoritarian states and great-power politics. That dependence needs to be broken, not deepened. Fossil fuels are in short supply right now, and we are trying to move away from them regardless — artificially lowering their price only sustains the dependence and slows the energy transition.

How Should the Support Be Given?

A better solution is to leave the price of fuel to the market and direct the support straight to citizens as money, for example as a one-off payment. That supports people’s purchasing power in hard times, without tying the support to buying fossil fuels. People can decide for themselves whether the money goes toward higher fuel costs, public transport, or anything else they choose. They know what is best for themselves better than ministers do.

The smart move is to support people’s livelihood and freedom of choice, instead of burning imported energy.