Fuel prices are dropping, but much more slowly than the price of a barrel of Brent crude. / efe

The oil price has dropped but it's not making much difference to the cost of fuel in Spain

Diesel is 22% more expensive since the Russian invasion of Ukraine and petrol 13% higher, although the cost of a barrel of Brent crude is now back at its level before the conflict began

LUCAS IRIGOYEN Madrid

There is a saying that the price of petrol goes up like a rocket but comes down like a feather, and the situation today certainly seems to be living up to that. The price of Brent crude has been falling since mid-May and was around 97 dollars a barrel yesterday (Thursday 11 August), which is similar to the figure prior to the Russian invasion of Ukraine, the conflict that is driving up energy costs.

However, the price of fuel isn’t following suit, or at least it is not doing so at the same speed. The fact that other factors are involved such as taxes (which account for 43.8% of the price at filling stations) makes it no less painful that the average price of diesel yesterday was 1.81 euros a litre, 22% higher than on 23 February, a day before Putin’s troops entered Ukraine. And petrol has gone up by 13% since then, to an average price of 1.80 euros per litre on Thursday.

These figures do not take into account the government subsidy of 20 céntimos per litre, which has brought the prices consumers actually pay to levels very similar to February, when petrol was 1.60 euros and diesel 1.49 euros a litre.

However, the Spanish Association of Oil Product Operators (AOP) says the price of petrol is not directly related to that of a barrel of oil because of other factors such as taxes, the cost of raw materials, distribution and refining.

Record profits

Meanwhile, the biggest fuel companies – Shell, Total, Equinor, Eni and Repsol – make record profits in the first half of this year, with figures three times higher than last year despite the pandemic and a drop in demand.

Oil prices have been dropping since May, when a Brent barrel was 123 dollars, and this is attributed to a drop in consumption and a pre-recession scenario, which is already being noted in the USA.

Also, a few weeks ago, Opec countries announced an increaase in production to 648,000 barrels a day, and on a recent trip to Saudi Arabia President Biden came to an agreement whereby production from that country will increase and thereby help to keep prices lower.

Doubts about China and its zero-Covid policy are also driving markets to predict a downward trend in the price of crude oil until 2023.