Brent barrel price: does not vary but gasoline and diesel rise. Why?

by time news

Oil and fuels move in different markets, so both their prices and the elements that influence the final price are different

If on the ascending line of the price of gasoline and diesel we were to draw another one that portrays the evolution of the cost of oil, we would see that they do not always move at the same time. This is the usual complaint from drivers: why, when crude oil rises, the disbursement necessary to fill the tank rises almost automatically, but if, on the other hand, oil stabilizes or even falls, it is not noticed so quickly at service stations. We’re looking at it this week; a barrel of Brent has had its most expensive price on Monday ($112.79) while gasoline and diesel, on the other hand, have become more expensive day by day.

The explanation is that oil and fuels move in different markets, so both their prices and the elements that influence the final price are different. In the first, the relationship between supply and demand is determined, for example, by the geopolitical situation, OPEC’s decisions in managing extraction quotas, existing reserves at any given time, the cost of extraction ( which is not the same in all deposits) or the economic evolution of the countries that buy the most. In addition, it is listed on the futures market, which is highly speculative.

The price of gasoline and diesel skyrockets in the Basque Country

As for fuels, the two reference markets for Spain are the Mediterranean and Northwest Europe. In them, the determination of the price is marked in the first place by what the raw material has cost and the exchange rate of that moment, since oil is bought in dollars. To this must be added the costs of the refining process (which vary depending on the quality of the crude, which is not always the same either) and the seasonality of demand, which is already much more local than in the oil market. In other words, to the circumstances that influence international demand, such as the embargo on Russian oil, at this point are added those closest to our own environment, such as the increase in displacement typical of Holy Week.

Then we must take into account the margins of the distributors, both wholesalers and retailers. There they are, in addition to their business benefit, a series of costs that do not go down even if the price of the raw material does (but they can become more expensive in an inflationary scenario) and that, obviously, are passed on to the consumer: transport, storage, maintenance of minimum security stocks or the marketing itself along with others such as the obligatory contribution to the National Fund for Energy Efficiency, created in 2014 to finance measures that support energy efficiency.

Finally, we must add the not inconsiderable tax burden. According to the AOP, on average last March, 42% and 50% of the final price of gasoline and diesel, respectively, was made up of their international prices, while the margins and distribution costs, for their part, accounted for between 14 % and 11%. In other words, 44% of what we paid for gasoline and 39% of what diesel cost were taxes.

One of these taxes is VAT, in which, as it is a percentage, variations in the cost of any of the components that make up the final price can be appreciated. But the other, the Special Tax on Hydrocarbons (IEH), was expressly created to discourage consumption and is fixed. It does not matter what happens with the price of oil or with that of refined products; always pay the same. Specifically, 0.47 euros for each liter of gasoline and 0.37 for diesel. In addition, another detail must be taken into account, VAT is applied after having added the IEH, so if it is fixed, part of the other is also fixed. In other words, when the factors that condition fuel prices rise, taxation continues at its pace, but instead, when they fall, what it does is cushion the decline.

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