The price increase of a liter of petrol and diesel at the pumps is on average twice that of a barrel of Brent
According to data from the National Institute of Statistics (INE), the consumer price index ended last June up 10.2%, with fuels rising to 40.7%. If we go into detail, we can see how diesel rose 42.7%, while gasoline rose to 34.4% year-over-year.
However, the increase in the price of petrol and diesel does not correspond to the increase or decrease in the price of a barrel of oil. This phenomenon is referred to as the ‘rocket effect’ and the ‘pin effect’ as a rise in the price of crude oil tends to cause a significant rise in gasoline, while a fall in oil does not.
When we talk about diesel and gasoline, we have to consider not only the value of the raw material (crude oil), but also the refining costs and the time that elapses between the initial purchase and the final stage of that process. To all this we have to add the distributor margins and the special taxes on hydrocarbons and the value added tax (VAT), which have a big impact on the selling price to the public.
Manel Montero, CEO of Grupo Moure, analyzes the current market situation and states that “price increases in general are a response to a ‘limitation of supply’, which has indeed been influenced by the war between Russia and Ukraine, as it is a global However, if this situation is added to the huge increase in the margins that the refineries have in Spain, which tripled in the second quarter of the year compared to the first, it shows that it is accelerating the escalation of the prices in the fuel.
In that sense, the price increase of a liter of petrol and diesel oil at the pumps is on average twice that of a barrel of Brent. Given this scenario, Montero refers to the bonus measure of 20 cents per liter of fuel and describes it as “ineffective”. The expert notes that “these kinds of measures that encourage consumption and that allow you to get discounts are totally wrong, as the balance between supply and demand is even more unbalanced. Likewise, increasing the tax burden on energy companies is wrong as it is a tax impact that is easily passed on to consumers.
Grupo Moure’s CEO warns of the risks of enforcing this decree, concluding that “other similar measures applied in neighboring countries have had similar inflationary results, showing that alternative measures must be taken much higher up the value chain to make the profits.” or keep prices under control, as has already happened in the gas sector.
However, it is necessary to remember that in reality Spanish consumers pay only half of what it costs us for the product, since, as the Spanish Association of Petroleum Products (AOP) points out, almost 50% is taxes. In Spain, in the absence of one, there are four taxes on fuel:
The first of these is the VAT on fuel, which is set at 21%. To this must be added the special state taxes on hydrocarbons, which specify a fixed amount for each liter. The main energy products taxed by the hydrocarbon tax include gasoline, kerosene, gas oils, fuel oils, liquefied petroleum gases, natural gas and finally biofuels and biofuels, when used as fuel or fuel.
The special tax on hydrocarbons is only applied to the peninsula and the Balearic Islands. It does not apply to the Canary Islands, Ceuta and Melilla.
These taxes, added to the VAT, account for more than half the price we pay for filling up at petrol stations. In the selling price of a liter of gasoline is 55% taxes, 15% distribution costs and margins and 30% raw material costs.
The case is similar for diesel, although the tax burden is slightly lower, 50%. However, distribution costs and margins are 14% and raw material rises to 36%.
Source: La Verdad
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
