IDEAS home Printed from https://ideas.repec.org/a/spr/series/v16y2025i1d10.1007_s13209-024-00302-9.html
   My bibliography  Save this article

The pass-through of subsidizing petrol consumption: the case of Spain

Author

Listed:
  • Juan Luis Jiménez

    (Universidad de Las Palmas de Gran Canaria)

  • Jordi Perdiguero

    (Universitat Autònoma de Barcelona)

  • José Manuel Cazorla-Artiles

    (Universidad de Las Palmas de Gran Canaria)

Abstract

In response to the rise in petrol prices following the invasion of Ukraine on 24 February 2022, the Spanish government introduced a fuel subsidy of €0.2 per litre from April to December 2022. Using weekly petrol price data, we estimate a difference-in-differences model, with European Union countries that did not introduce measures as the control group, to determine the potential price effects of both the subsidy and its impact after its removal. The causal analysis leads to several conclusions. First, the subsidy increased the net price of diesel by €0.0527 per litre. Petrol 95 does not appear to have changed significantly with the introduction of the subsidy. Secondly, diesel prices return to their pre-subsidy equilibrium when the subsidy is removed, so there does not seem to be any asymmetry in the pass-through. Finally, the pass-through was 73.65% for diesel and we cannot reject 100% in the case of petrol 95. Estimates confirm that at least 857 million euros of public funds were retained by the petrol companies, i.e. 23.8% of the total subsidy cost for diesel.

Suggested Citation

  • Juan Luis Jiménez & Jordi Perdiguero & José Manuel Cazorla-Artiles, 2025. "The pass-through of subsidizing petrol consumption: the case of Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 16(1), pages 107-135, March.
    • Handle: RePEc:spr:series:v:16:y:2025:i:1:d:10.1007_s13209-024-00302-9
    DOI: 10.1007/s13209-024-00302-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13209-024-00302-9
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1007/s13209-024-00302-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:series:v:16:y:2025:i:1:d:10.1007_s13209-024-00302-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.