2023-09-16 01:49:56
Madrid
Updated Saturday, September 16, 2023 – 01:49
The weight of VAT on the consumer’s pocket was boosted in the most expensive month of the year at Spanish gas stations
Pumps at a service station in Madrid.EFE
August, the most expensive month of the last year at Spanish gas stations, has left extra income for the public coffers. Consumers once again paid at gas stations throughout the country the figures that were observed in the worst moments of the energy crisis last year, when the Government’s discount of 20 cents on fuel still alleviated the impact of the lack of control in the markets. After months of a price truce that in January led the Executive to end the general reduction at the pump, gasoline and diesel resumed their rise at the beginning of summer until leading to a record August, a month in which the State reached to collect in taxes almost one euro more for each tank of gasoline than before the summer season.
The reason for this greater collection is not that the Government has increased taxes on fuel, but rather it is explained by the very nature of the tax burden borne by hydrocarbons in Spain. The final price of diesel and gasoline includes the payment of the Special Hydrocarbon Tax and VAT. The latter is what explains the highest Treasury collection for each liter of fuel that the Spaniards have refueled this summer.
The VAT borne by hydrocarbons, of 21%, taxes the value of the raw material, therefore, when the fuel market experiences an escalation like the one that occurred in the last summer season, the impact of this tax on the pockets of consumers also increases and, consequently, the contribution of said tax to the public coffers grows.
Filling an average tank of 50 liters of gasoline has gone from costing 79.65 euros in May to 85.05 euros in August. Thus, the VAT component in the final cost went from 13.85 euros in May to 14.75 euros in August, which represents almost one euro more for refuelingaccording to data from the EU Petroleum Bulletin and international quotes compiled by the Spanish Association of Petroleum Products Operators (AOP).
For its part, refueling the same 50 liters of diesel in May had an average cost of 71.35 euros, while last August it was 79.4 euros. If the VAT component is taken into account, it went from 12.4 euros to 13.75 euros, which implies an increase of 1.35 euros.
Faced with the variation in VAT, the Hydrocarbon Tax item remains the same in both cases, since it taxes consumption and not the value of the raw material. In fact, between the months of January and July, the Treasury collection for that tax it was 7,346 million1.4% less than in the same period in 2022. The latest collection report from the Tax Agency, corresponding to last July, does not yet incorporate the effect of the strong rebound in crude oil prices in August.
The forecast in international markets is that crude oil will continue its upward rally until the end of the year. There are several reasons that explain this trajectory, mainly the production cuts announced by OPEC (a decision that market sources attribute to Saudi Arabia). Different market agents consulted by this means agree that if OPEC maintains the current supply cuts until the end of the year, in a context in which fuel demand from Asia remains at current levels, the prices of a barrel of Brent They could exceed $100 before 2024, compared to around $91 today.
According to a recent report by Bank of America (BOFA), part of the current situation is explained by the European veto on Russian fuel. “With OPEC in the driver’s seat and Asian energy demand recovering, Indian refiners have benefited from sanctions on Russia and Iran by accessing lower-cost crude supplies and exporting expensive products to Europe,” the official said. global materials and raw materials and derivatives of BOFA, Francisco Blanch.
On the future, Blanch says: “Now that Saudi Arabia and Russia are implementing joint production cuts in a context of growing demand, the key issue for oil prices is When will economic and political interests misalign again? of the two largest oil exporters.
Not only Spain is suffering from the rise in fuel prices. In France, for example, some marketing company has declared a limit of 1.99 euros per liter. Market sources do not rule out that interventionist measures will once again occur in Spain, either by the marketing companies themselves or by the State. Government sources indicate to this medium that there is no decision made on the application of new reductions by decree on fuel and they insist that it is a “political decision”.
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