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Sweden plans USD1.5B subsidies against soaring prices

STOCKHOLM (AFP) – Sweden announced plans yesterday for a USD1.45 billion (EUR1.32 billion) subsidy package to help Swedes cope with soaring prices resulting from Russia’s invasion of Ukraine on the heels of winter’s sky-high energy prices.

The proposed subsidies include a temporary reduction of petrol and diesel taxes, a one-time minimum payout of SEK1,000 (USD104) to car owners, a one-month extension through March of a winter electricity subsidy for homeowners in central and southern Sweden, and a temporary increase in housing subsidies for the poorest families.

Sweden has among the highest prices in the world for fuel due largely to its high taxes, at around SEK21 (USD2.20) per litre for petrol and SEK25 for diesel.

If approved by Parliament, the measures would come into effect on June 1.

“We are today presenting an exceptional package of measures to counter the price increases we are now seeing as a result of Russia’s invasion,” Finance Minister Mikael Damberg said in a statement.

“The situation is still uncertain and prices are very volatile, but we can see that we need to support consumers in this acute stage and at the same time take measures to reduce our fossil fuel dependency.”

Prices in February were up by 4.5 percent from a year earlier, Statistics Sweden said yesterday, the highest level since 1993 when the country was in deep economic crisis.

Electricity was 14 per cent higher than a year ago, while food prices rose by 3.6 per cent and clothes by five per cent.

Analysts noted that those increases in February did not include the effects of Russia’s invasion – which began on February 24 – and predicted further hikes to come.

Gamla Stan in Stockholm, Sweden