When the Government proposed in March a fiscal relief of 20 cents per liter in fuel prices, of which the Administration would support an adjustment in its income of 15 cents and the service stations, of 5 cents, there were many voices that they claimed that gas stations would absorb this hole in the form of higher prices. And indeed, the service stations did not take long to raise their prices to compensate for the measure. However, barely a month and a half after the introduction of the measure, the gas stations are going much further and are already eating a good part of the subsidy corresponding to the Administration’s income.
After the introduction of the measure, the prices of gasoline 95 have increased by 6.01 cents per liter, going from 1,818 euros on March 28 to 1,878 euros today, according to data published yesterday in the Oil Bulletin of the European Commission. But in this same period the average price of this fuel has fallen by 2.07 cents in Europe as a whole, which means that there is a gap of 8.08 cents per liter between the two.
In other words, the service stations have not only fully compensated their corresponding part of the tax relief, but they have also eaten another three cents of the reduction assumed by the Executive, 20% of their part. And the situation is even more relevant in the case of diesel, since over the last five weeks diesel prices have risen 7.43 cents per liter in Spain, to 1.911 euros, while they have fallen by 5 .58 cents in Europe. That is, a gap of 13.01 cents that eats both the entire reduction that the gas stations should assume and more than half of that provided by the Administrations.
Price increases are striking at a time when oil is not particularly stressed. In fact, after the sharp peaks in the price in March, when Brent reached over 139 dollars per barrel, the price of crude oil has eased to around 100-110 dollars, although it is true that they remain historically high levels and that there is a certain gap between the price of crude oil on international markets and the price of fuel at the pump. However, this increase was a very real possibility from the outset, given that the Government has declared on numerous occasions that it would be vigilant against the decision of the service stations to apply these increases, and also other institutions such as the National Commission of Markets and Competition (CNMC) or the Independent Authority for Fiscal Responsibility (Airef) have declared that they are pending the market.
Thus, the Minister of Economic Affairs and Digital Transformation, Nadia Calviño, has slipped on several occasions that the operators could be benefiting from the measure. “We have to analyze which are the measures that are being effective, or more effective [para combatir la inflación], and which ones don’t. If we see, for example, that one is keeping prices down because the operators are absorbing this aid, we will not continue with it,” he said recently, referring to the non-renewal of the fuel subsidy as of July. For this reason , Calviño demanded “responsibility from all companies, and in particular from energy companies, because among all of us we have to help resolve this situation” of inflation.
If the fuel subsidy measure is not renewed, the big problem is, what will happen to the service stations that have decided to increase their prices? There are many possibilities that the increase registered in recent weeks will remain, to a greater or lesser extent, in prices at the pump. In fact, experience with other increases and decreases in taxes on specific goods shows that companies pass on tax increases but absorb part of the decreases, as happened with the case of VAT on cinema. This tax rose from 8% to 21% in 2012 and the rooms passed it on in full, but when it was reduced to 10% in 2018 they only applied a third of the reduction.