A gifted fuel...

You always have to look at the tooth of the gift horse, especially if it comes from confusing places. You, who read this type of column about energy, likely belong to a nearly homogeneous segment: men and women with middle-high incomes, over 30 years old, living in capital cities. It is an audience that spends monthly on gasoline, according to the National Department of Statistics, between $45,000 and $110,000.

You are surely a beneficiary of a gift that the national Government gives you for having a car. Because when you go to fill up at a gas station, you have ended up paying even half the real price of gasoline. The rest is a gift made by the most vulnerable families in the country, without them knowing and without you deserving it.

For every trillion pesos that the nation spends subsidizing fuel consumption, 24% goes to high-income households. While a household with monthly income of $330,000 receives a subsidy of $5,000 in gasoline, a household with income over $5,000,000 receives $75,000. Giving more to those who have more is a principle of regressivity and social injustice.

The way the scheme that defines fuel prices is structured today has us paying for one of the cheapest gasolines in the region, only surpassed by Venezuela and Bolivia. The above is not an achievement to celebrate. Quite the opposite. It is one of the forms of state intervention in the market that does the most harm to equity.

The problem is not only who receives these subsidies, but also where the resources come from. Just last year, the country completed almost 40 trillion pesos allocated in part to filling up cars, trucks, industries, and families that do not need help.

Fortunately – and unpopularly – the Government has been increasing fuel prices. Because if we continued as we were, in two years we would spend $80 trillion pesos on those subsidies. With that money, we could address the pension deficit, undertake the largest infrastructure program in the country's history, increase spending on security, and maybe we would even have leftover money.

This hard-to-reject gift horse is lame and cannot support itself; its back is curved from the heavy load it carries; it has aged poorly and needs a bit that makes it stop or gives it direction. It is a gift with a worn and inflamed tooth that has left a fiscal hole of large proportions.

It should also be taken into account that when fuel prices are increased, those extra pesos go to cleaning up the State's accounts and not to any company.

The free fuel is, as “The Economist” titled it, good for politics, but bad as public policy. The decision of this Government to gradually raise prices has been correct.