The war in Iran drives up the price of fuels and the cost of living for families
Prices rose 3.1% annually in March in Catalonia, three tenths less than the state average
BarcelonaThe rise in fuel prices caused by the war in the Middle East sent the cost of living soaring in Catalonia and Spain in March, the first month with the war's effects, according to consumer price index (CPI, the indicator that measures the cost of living for families) data published this Tuesday by the National Statistics Institute (INE).
Thus, in Catalonia, prices of consumer goods and services for households closed last month with an increase of 3.1% compared to a year ago. This is a figure that far exceeds the annual rate of 2% with which February had closed, when the effects of the US and Israeli attacks against Iran did not yet exist. Compared to the previous month, prices grew by 1.1%, six tenths more than the monthly rate between January and February.
As for the whole of the State, prices increased by 3.4% compared to March 2025. Thus, the INE revises the definitive CPI data for March up by one tenth compared to the first advance published last March 27. Compared to the previous month, the increase was 1.2%, two tenths more than predicted three weeks ago by the statistical body.
"This figure is mainly explained by the rise in fuel prices, a direct effect of the conflict in the Middle East," the Ministry of Economy stated in a statement sent to the media this Tuesday. March prices reflect the first effects of the package of fiscal measures approved by the Spanish government
on the 20th of that month, which included a reduction in VAT and other special taxes on fuels, electricity, natural gas, as well as additional aid to the professional groups most affected by rising energy costs, such as farmers or transporters.
Core inflation (which excludes energy and fresh food, which are more volatile) was 2.9% annually in the State, two tenths above February's level.
The impact of the war
Fuels are the element that has most driven up the cost of living. In the country as a whole, fuel prices rose by 4.5% in just one month, a very significant increase considering that, under normal conditions, monthly increases are usually less than 1% or, in some cases, even negative. If we look only at fuels for personal vehicles, i.e., the gasoline and diesel that families use for their cars, the increase was 14.3% between February and March.
In Catalonia, all fuels (professional and for private use) became 10.3% more expensive in one month.
This sharp price increase is explained by the effects of the war against Iran, initiated by the United States and Israel on February 28. The hostilities, which have spread to most countries in the region —such as Saudi Arabia, Qatar, Bahrain, Iraq, and Kuwait—, have affected the energy infrastructure of many of these states, which are among the world's leading exporters of oil and natural gas. Furthermore, the Iranian government has blocked the passage of ships through the Strait of Hormuz, the gateway to the Persian Gulf from the Indian Ocean, through which a fifth of the crude oil consumed on the planet passes.
This inability to export oil and gas, along with damage to infrastructure and uncertainty, has sent the price of hydrocarbons soaring, and therefore, oil derivatives such as gasoline have been the first elements to increase in price.
On the contrary, electricity has not suffered the increases it did in 2022, when a similar situation occurred following the Russian invasion of Ukraine, but has instead fallen. Specifically, the price of electricity decreased by 1.9% in March compared to the previous month, and natural gas by 3%.
In this case, although the government of Pedro Sánchez has also cut taxes on electricity bills, in Spain's case there is the added factor that it has increased its energy production capacity with renewables, which fix the price of electricity for 85% of the hours of the day on average. "Electricity is acting as a buffer against the energy shock," indicated the Ministry of Economy, which added in its statement that "Spain's commitment to renewables is a shield against the impact of the war."
Beyond energy, the cost of clothing and footwear is the other element that has become more expensive, with monthly increases in Catalonia of 6.2% and 5.2%, respectively, a common occurrence at this time of year. Furthermore, restaurants and hotels also pushed the CPI upwards, with a price increase of 0.7% in one month, as the last days of March coincided with the start of Holy Week.