The war in the Middle East has already increased fuel prices by tens of percent. The political situation in the region, which fluctuates from day to day, is not stable, and this will continue to be reflected in the price of oil in the future. The situation is pushing companies operating in the transport and machinery sectors to their limits, and the organizations representing them are therefore proposing the introduction of a temporary fuel subsidy. The subsidy mechanism would ensure the continuity of sectors critical to security of supply even if prices start to rise sharply again.
Industries that use heavy vehicles and machinery consume a total of over two billion liters of diesel and light fuel oil per year. For example, an increase of just over 50 cents per liter in the price of fuel means an additional burden of over a billion euros on the industry annually.
In 2022, after Russia invaded Ukraine, Finland introduced a temporary fuel subsidy. It strengthened the operating conditions of companies in an exceptional situation and provided a vital perspective on the crisis. The Finnish Transport and Logistics Association SKAL, the Finnish Bus and Coach Association, the Finnish Railways Association and the Finnish Railways Association INFRA propose re-introducing a similar procedure.
"Industries that depend on heavy vehicles and large machines are very critical to security of supply. In them, companies are responsible for the movement of people and goods, as well as the smooth operation of traffic routes, municipal engineering and industrial material and raw material logistics," INFRA's CEO Paavo Syrjö justifies.
"When the wheels of society have to turn and everyday life has to continue, reducing fuel purchases and scaling down business operations are not among the options," continues the CEO of Koneuryrittäjät. Matti Peltola.
Companies communicate about challenges every day
Organizations representing companies in the transportation and machinery sectors now hear daily about situations where the sharp increase in fuel prices has jeopardized the continuation of business operations.
"Companies have not been able to prepare for such rapid price increases. For Finland, which is heavily dependent on road transport and the export industry, the operational capacity of these companies is important, and therefore fuel subsidies are justified," SKAL's CEO Anssi Kujala says.
The advantages of the support model, which was successfully used four years ago, are its rapid implementation and precise targeting of companies that use the most fuel. The support would be applied for retrospectively, which would directly target companies in the sector.
"There is reason to move quickly on this matter. A law on fixed-term fuel subsidies for transport and machinery companies can be made based on the regulation from four years ago, with more details. Practical measures have already been implemented once at the State Treasury", CEO of the Finnish Bus Association Mika Mäkilä to point out.
Additional information:
INFRA ry, CEO Paavo Syrjö, tel. +358 40 560 1803
Finnish Transport and Logistics Association SKAL, CEO Anssi Kujala, tel. +358 40 056 7925
Finnish Bus Association, CEO Mika Mäkilä, tel. +358 40 060 6750
Finnish Machinery Entrepreneurs Association, CEO Matti Peltola, tel. +358 40 900 9412