At the moment everybody receives the discount when they pay for their fuel. sur

Spain is likely to make changes to the way the government fuel discount is applied from 1 July

There is concern that the big oil companies are increasing their prices to offset the discount, so the authorities are looking at ways to ensure that those most in need do not miss out

José María Camarero

Madrid

Tuesday, 10 May 2022, 10:01

On 1 April, the Spanish government introduced a three-month discount on fuel to offset the constantly increasing prices. It is now considering what to do from 1 July, and everything points to a change in the way the discount is applied.

At the moment, petrol and diesel are 20 céntimos per litre cheaper than they would otherwise be, with the government funding 15 céntimos of the discount and the oil companies paying the other five. However, there are concerns that some companies are taking advantage of the situation and increasing their prices to "swallow up" the discount.

One option would be to provide the discount for those who most need it. This is something that was suggested originally, but the Ministry of Finance decided it would be too difficult to differentiate between users when it came to filling their vehicle with fuel. However, there are other ways of achieving it, such as applying a retrospective refund, or providing some type of voucher to be presented when paying for the fuel.

Veto Russian oil and gas imports

Fuel prices will continue to rise in the forthcoming months and are not expected to drop again this year. Tension over the war in Ukraine is increasing, especially since the European Commission said it would veto Russian oil and gas imports. The mere announcement of these intentions is having an effect on prices: a barrel of Brent was around 106 dollars on Monday, practically the same as at the end of March, when the government approved the anti-crisis decree. In fact, several analysts have said that crude oil, and therefore fuel, will remain between 90 and 120 dollars per barrel during the second half of his year.

The government’s decision will depend to a great extent on analysis from the National Markets and Competition Committee on fuel prices. At the moment, the average cost of diesel is 1.91 euros per litre, six céntimos more than at the beginning of April. Petrol is currently around 1.88 euros, which is three per cent higher than six weeks ago.

The government has warned energy companies that if they are increasing their prices to “absorb” the discounts, the measures will be withdrawn on 30 June. Nadia Calviño, the Miniser of Economic Affairs and Digital Transformation, called on all companies, but especially oil companies, to act responsibly, saying that "We all have to do our bit".