Spanish fuel prices climb for fifth week as tax relief winds down

Spain has experienced five consecutive weeks of rising fuel costs, with the EU Oil Bulletin reporting average petrol at €1.69 per litre and diesel at €1.79 per litre for the week of 27 July to 3 August. Prices jumped sharply after the government reduced the excise-duty rebate on hydrocarbons from 15 to 10 cents per litre and reinstated the full 21 % VAT, ending a period of reduced rates. A planned further reduction to a five-cent subsidy in September will likely keep prices elevated.

Although crude oil prices fell last week on expectations of de-escalation in the Middle East, the savings have not been passed on at Spanish pumps. The higher fuel costs are already feeding into inflation, with the CPI rising to 3.5 % in July, and they come at a peak travel month, prompting criticism from the Spanish Confederation of Service Station Operators about the impact on consumers and tourism.