A reduction of 20 cents per liter in gasoline and diesel is consumed by rising fuel prices

A reduction of 20 cents per liter in gasoline and diesel is consumed by rising fuel prices

Oil prices continue to rise and the Government’s effect of reducing 20 cents per liter is starting to decline. The government believes that prices are not as low as they should be, but the industry thinks otherwise.

Since April, the Spanish government has taken steps to reduce the cost of the Ukraine crisis, including a 20-cents per liter bonus on increasing oil prices. This discount is divided into 15 cents less for tax and 5 cents less for the service center.

In some cases, the discount may be as high as 45 cents when certain conditions are met and only by loyal customers. Some energy companies like Repsol say that they sometimes sell at a loss, even though prices are high.

According to official European Union data and oil price data, gasoline was in Spain –without taxes– for € 1,026 / l and diesel for € 1,106 / l. A report last Thursday, May 5, shows a similar situation of € 1.045 / l for petrol and € 1.168 / l for diesel. Raise taxes, and without additional spending, is € 1,837 / l for petrol and € 1,872 / l for diesel.

First Vice President and Minister for Economic Affairs and Digital Transformation, Nadia Calviño, explained that the Government believes that there are oil stations “eating” a 20 cents discount, and. The National Marketing and Competition Commission is already investigating it.

The report that the CNMC will submit will be used to determine whether the 20-cent discount will be increased in July, or if it expires on June 30. In Minister Calviño’s view, he believes there are tricks to keep prices down, and that this is detrimental to consumers.

As usual, the reality is usually more complicated. There are two ways to buy oil at the national level, one is to import crude oil and refine it in one of the five major oil refineries, and the other is to import it already refined. Both and other methods involve paying more than the last few months.

Brent Neighborhood Price Trends – Chart: Five Days

Although Spain does not rely heavily on Russian oil, the effect is similar in international markets. The retail price of a barrel of crude oil, Brent, sells for $ 113, though the worst came in early Marchwhen it touched $ 130.

The cost of the barrel has more than doubled in just a few months, it was ready to rise before the Russian military invasion of Ukraine began. Putin’s trip has increased prices, but the direction of the plant is basically the same.

Having said that, it does not appear that the fault lies in the service centers, which are usually SMEs, but due to global market pressures. The same can be said of diesel refined diesel, their price per ton has also doubled recently, and this happens with and without discounts.

When fuel station customers struggle between resignation and anger, some entrepreneurs are having a hard time. They have been forced to take a customer discount early, as the Government pays later, and at this cost sometimes financial costs have to be increased by having to apply for a loan.

If the Government does not extend the time for such assistance, demand may be reduced again and truck owners may be able to disable the transaction again. However, the basic situation remains the same, in Spain we pay pre-tax fuel, one of the most expensive in the European Union, although there are worse tax evasion.

As long as the current (war) and structural (global market) situation is not stable, there is no alternative but to reduce fuel consumption by using less car, or by using it more efficiently. Either that, or take the stick in your pocket.

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