Fuels in Castilla y León have been falling for several weeks and arrive at the start of summer with a respite in prices after the first months marked by volatility unleashed after the Iran war. 95-octane gasoline and diesel are already far from the highs reached after the outbreak of the conflict in the Middle East on February 28, when they touched two euros per liter. Now, the average price of 95 gasoline in Castilla y León stands at 1.468 euros per liter, even below the 1.491 euros of the week before the conflict erupted. In the case of diesel A, the adjustment has also been intense, although it has not yet fully returned to pre-war levels: it trades in the region at 1.545 euros, compared to 1.452 euros at the end of February. A very different reality from March, when diesel touched 1.925 euros per liter and gasoline climbed to 1.775 euros. That is, the market has corrected much of the initial blow caused by tensions in the Middle East and fear of an oil blockade. But now it's time to look at the calendar.
Specifically, this Wednesday, July 1, when some of the measures approved by the Government of Spain in March to alleviate the impact of the fuel price crisis could lapse if it decides not to extend them. For example, the VAT reduction, which during these months has allowed fuel prices to fall, could be revoked from Wednesday, resulting in a sudden increase of between 20 and 30 cents per liter. A situation that would be a shock for professionals and families on the eve of a summer that could be the most expensive for fuel in the last decade. With the consequent impact on inflation.
Flourish template: Line, bar and pie charts
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Precisely for this reason, the sector argues that the government has 'room' to maintain the bonuses during these summer months of greater mobility. 'If the holiday period comes, families would benefit from the reduced price and it would boost the economy much more,' the president of the Association of Retail Sellers of Fuels and Combustibles of Castilla y León, Rafael Pizarro, told this newspaper, who believes that extending the tax cut would be a direct way to relieve households during the holiday season.
His argument is that although oil has eased and pumps have passed on part of that drop, the market is still far from being stable. 'It is clear that prices have to come down, because oil prices are falling, and the real price is passed on as quickly as possible,' explains Pizarro, who then insists that what has not disappeared is 'the underlying instability.' On the other hand, Pizarro recalls that about half of what the consumer pays for a liter of fuel is taxes, so he argues that the central government can afford to temporarily reduce that burden. 'If it settles for 35% for a while, nothing happens,' ironizes the head of the sector's employers' association, who believes that this is not aid to the sector, but a tax cut that allows more liquidity in the hands of families, transporters, and companies.
The decision, in any case, is in the hands of the government, which has not yet commented on the continuity of these savings measures. The royal decree approved in March, in force until June 30, linked the continuity of the measures to the persistence of a 'significant alteration of international prices,' and 'the correction of oil during June may work against a new extension.' However, the sector maintains that the scenario remains 'unstable enough' to maintain the relief, at least until the end of summer.
However, the extension is not without obstacles, and the European Commission has already warned Spain that EU regulations do not allow a reduced VAT on fuels. For Pizarro, that warning does not eliminate the government's room, but forces it to find another formula so that the consumer does not bear the full tax burden at once: 'Here tax is levied on tax.' All in all, Castilla y León arrives at the start of summer with much more contained fuel prices than three months ago, but without knowing what will happen to the bill from July 1.
