Rising fuel prices combined with an electricity market where prices are on a roller coaster could, in the worst case, force the government to introduce rationing. That warning comes from Finance Minister Elisabeth Svantesson (M).
The government’s and the Sweden Democrats’ ambition is to be able to further reduce the gasoline tax in the near future, but at the same time they are signaling that fuel could become scarce depending on how the war in Iran develops. Even though U.S. President Donald Trump and his administration have said they do not want a prolonged war like in Iraq, it could still be a while before they accomplish what they aim to do in the region.
– Unfortunately, we don’t know what Donald Trump is thinking; he can have different motives on different days. I don’t think his plan was to stay there for so long, but now they remain. And even if the U.S. withdraws, what happens then? The conflict likely won’t end there, says Svantesson to Aftonbladet.
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In order to implement additional tax cuts on fuel, a temporary decision from the EU is required, and Elisabeth Svantesson has made it clear that this must happen quickly.
– It can move fairly quickly. Our tax cut down to the EU minimum level will take effect as soon as May 1. Lowering it further requires approval from the commission, and that could take a few months.
Another measure the government is considering is using the over SEK 80 billion in capacity charges that Svenska kraftnät holds to provide direct support to Swedish households.
Situation Could Soon Turn
Currently, there is no immediate danger to the fuel supply, but at the same time, contingency plans are being made for the worst-case scenario. According to Svantesson, we are not there yet, but “one should always prepare for the worst and hope for the best.”
– If this drags on and becomes prolonged and prices get very high, then we’ll all need to consider how to respond. Otherwise, prices will soar tremendously and there could be shortages. But we are not at that point now.
To households currently struggling financially, Svantesson says that things will soon turn around, and with reductions in taxes, food prices, and preschool fees, people’s wallets will soon see a bit more money.
Serious Situation
The Swedish Energy Agency notes that conditions can change at short notice if the conflict continues.
– We are in a serious situation and the risk of fuel shortages may increase going forward. However, that does not automatically mean that shortages will actually occur. Sweden could be affected, and we are closely monitoring the situation and analyzing the need for different measures, says Caroline Asserup, Director General at the Swedish Energy Agency.
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