Fuel prices in Spain increase after removal of government discount but remain lower than when it began

After the removal of the government’s 20 cents per litre discount, fuel prices have increased at pumps in Spain.

After the removal of the government’s 20 cents per litre discount on fuel, as expected, prices have risen at petrol stations across Spain. In recent weeks, both petrol and diesel prices had been falling slowly but the discount is now only applied to specific economic sectors such as industrial transport.

This Thursday, January 5, the average price of petrol stands at €1,583/litre, an increase of 1.8 cents. Diesel has gone up by 1.7 cents to an average of €1.660/ litre.

Although both fuels have increased in price, they remain far from the highs that were hit last July. Petrol reached €2.14/litre and diesel was at €2.10/litre. Today’s levels are also below those that were in place when the government subsidy came into force at the end of March 2022. At that time, petrol was €1.81/litre, and diesel was €1.83/litre.

For the first time since last August, both fuels are almost the same price, although they stand at a higher level than the corresponding month of 2022. Last January, petrol was €1.479/litre, and diesel was €1.347/litre. That makes petrol 6.95 per cent more expensive, and diesel, 23.88 per cent higher in the last 12 months.

According to the Weekly Oil Bulletin, the price of fuels depends on multiple factors, such as their specific price (independent of that of oil), the evolution of crude oil, taxes, the cost of raw materials and logistics, and gross margins. In addition, the evolution in the price of crude oil is not transferred directly to fuel prices, but rather with a time lag.

With these levels, the price of unleaded 95 petrol in Spain – without taking into account the subsidy – still remains below the average for the European Union. This currently stands at €1.672/litre, while in the eurozone, it is an average price of €1,715/litre

In the case of diesel, the price in Spain is lower than the EU average of €1,759 euros, and also below that of the eurozone, where it is €1,778/litre, as reported by 20minutos.

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