Isra-Mart srl:Spain's motorists start new life in the slow lane

www.isra-mart.com

Isra-Mart srl news:

Spanish commuters are coming to terms with a temporary lower speed limit introduced yesterday as part of efforts to save billions of euros in the face of rising oil prices.

Teams worked throughout Sunday night, covering around 6,000 of the old 120km/h (75mph) signs with stickers displaying the new 110km/h (68mph) speed limit, which will remain in force for at least four months.

The move is part of a package of oil-saving measures announced by the government last week, including increasing the proportion of biofuels blended with diesel, cutting rail fares, tax breaks for energy-efficient tyres, and switching to more efficient lighting.

The government has said the moves are necessary as Spain depends on imports for 75 per cent of its energy while sourcing about 13 per cent of its oil from Libya.

It estimates the measures will save €2.3bn (£2bn), but it has not given an indication of how much tax revenue it could lose from lower petrol sales. Changing the road signs for just four months is expected to cost €250,000.

"We are going to go a bit slower and in exchange we will consume less petrol and pay less money," said deputy prime minister Alfredo Perez Rubalcaba.

But the plan has proved controversial. Many people are reportedly suspicious that the new limits are simply a ruse to raise revenues through fines – violators will have to pay €100 penalties – and a weekend poll by El Pais showed that 69 per cent of Spaniards oppose the speed limit reduction. Opposition parties said the reduced speed limit would make little impact on Spain's overall oil bill.

Economists are also baffled by the plan, arguing that slower speeds on the road will have a similar effect on the economy.

"It's hard to see how reducing speed limits will make a difference at all for the Spanish economy. If anything, freight and people will move at a slower speed; the Spanish economy will be less competitive," professor Javier Diaz-Gimenez of the IESE business school in Madrid told the BBC.

Even two-time F1 racing champion Fernando Alonso has waded into the debate, declaring it will be "hard to stay awake" driving at the new limit.

"Lewis Hamilton [Alonso's main competitor] doesn't fall asleep at 110km/h," retorted industry minister Miguel Sebastian, referring to the UK's lower speed limit.

Although Spain is the only country currently taking this action, the go-slow does have a precedent.

Previous oil crises in the 1970's prompted the US government to cut highway speeds to 55mph in 1974, although widespread outcry forced limits back up to 65mph soon after.