Spain launches new fuel price cuts on Tuesday

The breakdown of the July CPI confirmed that the diesel sub-category recorded a year-on-year price rise of 15.7% last month, exceeding the 15% threshold set out in the decree on measures to mitigate the impact of the war in Iran.

Once this threshold is exceeded, the safeguard clause in the anti-crisis response plan automatically activates, meaning that the reduction in the hydrocarbons duty applicable to diesel will rise to 20 cents per litre from this Tuesday.

By contrast, petrol, which rose by 7.3% year-on-year in July, below the 15% threshold, will continue to follow the standard phased reduction schedule, with a reduction of five cents per litre this September.

"The mechanism operates proportionately, strengthening protection only where price pressures justify it," the Ministry of Economy stated. Consequently, diesel will see a reduction this September that is double that applied in August (ten cents), while petrol will go from the ten cents in August to the five that will now be applied in September.

The ministry considers that the latest royal decree-law on anti-crisis measures takes a protective approach that is "tailored to developments in the conflict in Iran, with a prudent design that allows for the level of protection to be raised again should an adverse scenario arise".

The remaining anti-crisis measures remain in force as provided for in the same royal decree-law. The government will continue to monitor the impact of the war on the Spanish economy "minute by minute", "in close collaboration" with the social partners and the sectors most affected.

Last Friday, the INE national institute of statistics published the preliminary CPI figures, which once again point to a sharp rise in fuel prices.

Year-on-year inflation rose from 3.6% in July to 4.3% in August, reaching its highest level since February 2023 and exceeding 4% for the first time since April 2023.

The INE attributes the sharp rise in the CPI in August to higher prices for fuels and lubricants for private vehicles, as well as to food prices falling by less than they did in August 2025.

"Headline inflation in August stood at 4.3% year-on-year, mainly due to rising fuel prices caused by the ongoing energy 'shock' resulting from the war in Iran," the Ministry of Economy said.

This figure of 4.3% is preliminary. The final figure will be released on 15 September, when we will be able to see in more detail which items in the shopping basket contributed most to the rise in prices in August.

Fuel prices rose for the eighth consecutive week last week, bringing the total increase to almost 24% since the 10% IVA reduction was withdrawn at the beginning of July and reaching summer highs.

Specifically, the average price per litre of diesel rose by 1.8% last week compared with the previous week, reaching 1.861 euros. It has now stabilised at its highest levels since mid-April.

Meanwhile, the average price per litre of petrol rose last week to 1.723 euros, up 1.55% on the previous week, reaching its highest level since March, according to data from the EU oil bulletin.

With these latest rises, the price of diesel has risen by more than 23.7%, while the price of petrol has risen by 19.8%.

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