Filling the tank will be more expensive from July 1st

If the council of ministers convened for Monday, June 29, does not decide to extend the exceptional fiscal measures regarding VAT and fuel taxes, filling the tank from July 1 will be significantly more expensive for Spanish consumers. The war in Iran and the tension of the blockade in the Strait of Hormuz sent the price of a Brent barrel soaring in mid-March, causing the Spanish government to react through a royal decree-law that, among other measures, reduced the VAT rate from 21% to 10%, a move that generated some criticism from the European Commission, which has never approved this decision.The reduction in VAT and the tax on hydrocarbons allowed for a reduction in the price of diesel and gasoline, which at the peak of the crisis had reached over two euros per liter, down to the current average of 1.42 euros per liter for gasoline and 1.47 euros per liter for diesel. This move also helped to somewhat control the inflationary trend in the Spanish economy and stabilize it around 3%.An increase of up to 30 cents

The provisional calm in the Middle East and the reopening of the Strait of Hormuz have allowed the price of a barrel of Brent to be positioned around 78 dollars per barrel, far from the peaks of 120 dollars per barrel of crude that were paid at the height of the crisis. This more favorable international scenario and community pressure to recover the tax rates on hydrocarbons prior to the Iran war would be two decisive conditions for not extending the extraordinary measures for individuals approved in May. For instance, Germany has taken clear leadership at the European level and has already announced that it will not extend the temporary fiscal measures on hydrocarbons.However, this reduction in the price of the Brent barrel has not been very noticeable at petrol stations, which warn of the dire consequences for the Spanish economy if these temporary measures are eliminated. The Spanish Confederation of Employers of Service Stations (CEEES) has calculated that the return to VAT at 21% and the end of the reduction in hydrocarbon taxes will have a combined effect that could increase prices by up to 29 cents per litre for petrol and 22 cents per litre for diesel. This would place the average price per litre of petrol at around 1.74 or 1.75 euros per litre for petrol and diesel, respectively. In practical terms, this would mean that filling the tank of a vehicle with a capacity of 60 litres would go from the current 85.2 euros to 105 euros, an increase of more than 23 euros that would have a direct effect on inflation on the eve of summer, the time of year that, by far, registers the most private mobility.Experts point out that the price of fuel will take several more months to regularize and to notice the drop in the price of the Brent barrel due to the depletion of strategic reserves that countries have used as an emergency measure to guarantee fuel supply. Finally, it is worth remembering that the different administrations do not look favorably on subsidizing a polluting fuel and that the advice of the European Union must be followed, which advocates concentrating aid and tax incentives on zero-emission electric vehicles.