Spain drivers get another month of fuel relief as November discount is confirmed

Drivers who were bracing for a jump at the pumps from Sunday can relax, because the 20-cent fuel tax cut isn’t shrinking after all. September’s soaring fuel inflation has triggered the government’s own safety net, though what happens in December is still up in the air.

Why the discount stays where it is

Drivers in Spain will keep paying 20 cents a litre less in fuel tax throughout November, after official inflation figures showed petrol and diesel prices running far above the level that triggers extra help. The government’s anti-crisis decree had planned to shrink the cut to 13 cents in November and 6 cents in December, as EWN reported when the October discount was announced. However, it also carries a safeguard clause, which keeps the full 20 cents in place when a fuel costs more than 15 per cent above its price a year earlier. 

That test was passed with room to spare. The National Statistics Institute (INE) said on Wednesday October 14 that petrol was 27.5 per cent dearer in September than a year before, with diesel up by roughly 34 per cent, according to Infobae. Congress’s standing committee then ratified the decree on Friday October 16, so the November rate is locked in.

Behind the rises sits the conflict in the Middle East, with oil spiking in mid-September after attacks in the Strait of Hormuz. It has eased since, though not by enough to bring pump prices anywhere near normal.

What the cut is worth at the pump

On a 50-litre tank, the 20 cents is worth about €10, and a little more once VAT is added on top. Had the cut shrunk to 13 cents, the same fill-up would have cost around €4 extra, with petrol and diesel both set to rise by roughly eight cents a litre.

Petrol drivers have felt it most. Their discount jumped from five cents in September to 20 in October, which is why petrol fell by about nine cents within days while diesel stayed put.

However, the saving only reaches your wallet if petrol stations pass it on in full. That was the sticking point in early September, when transport federation Fenadismer said many stations hadn’t passed on the diesel cut. The discount doesn’t apply in the Canary Islands, Ceuta or Melilla either, according to Selectra.

Pump prices are still well above last year 

On Friday October 30, a litre of 95-octane petrol averaged €1.731 across the mainland and Balearic Islands, with diesel at €1.900. Diesel is now the dearer of the two, which comes down to the higher cost of refining it rather than tax. Petrol peaked at an average of €1.94 on Monday September 28, its highest level this year, after 11 straight weeks of rises. In early October, petrol was still almost 25 per cent dearer than a year earlier and diesel almost 36 per cent.

Spain still compares well with its neighbours though. Taxes make up 34.4 per cent of a litre of petrol here even with the discount counted in, against an EU average of 46.5 per cent, and only Poland and Sweden had cheaper petrol on October 5. 

December is still up in the air

The 20 cents isn’t guaranteed beyond this month. Unless the safeguard is triggered again, the cut will fall to 13 cents in December. That depends on October’s inflation figures, which the INE publishes in mid-November, with petrol and diesel each tested against prices from a year earlier. So the two fuels could even end up with different rates. 

Until those figures land, drivers won’t know whether December brings 20 cents or 13.