A man refuels his vehicle. /
The EU minimums in Hydrocarbons give more possibility of action in gasoline than in diesel, to which VAT can be added at 10%
With practically half of each replacement liter of fuel destined to pay various taxes, the Government is studying how to apply a tax reduction to cushion the impact that the maximum gasoline and diesel prices are causing in the pockets of individuals and companies. The margin that the Treasury has is wide. His decision will be announced at the Council of Ministers on March 29. And although there are several regulatory limitations in force, a draft measure could lower current fuel prices by up to 15%: 1.68 euros per liter in gasoline and 1.58 euros in diesel.
There are two major taxes levied on fuel in Spain: the Special Tax on Hydrocarbons and VAT. In the first case, it is a fixed tax figure, which is taxed at around 0.47 euros for each liter of gasoline consumed and around 0.38 euros in the case of diesel. These taxes are only regulated by the European Union by establishing minimums, although each State has the flexibility to reduce or increase these amounts.
Specifically, in gasoline, the minimum rate established by Brussels is about 0.36 euros per liter. That is, about 0.11 euros compared to the tax currently applied in Spain. On the other hand, in the case of diesel, the action has less room for movement, having a floor of 0.33 euros per liter, about five cents less than what is currently paid.
Treasury has these possibilities to reduce Hydrocarbons, although the voices that advocate “eliminating” it would not be viable from a legal point of view, due to those minimums established by the EU.
The other tax route to remove fuel taxes is VAT. They are currently taxed at 21%, that is, the general rate. Applying a reduced VAT (10%), as the Executive has done in the electricity bill, would imply a reduction of about 0.15 euros per liter, on average, in the case of gasoline and diesel, taking into account account the latest prices published by the EU Petroleum Products Bulletin, as well as the updated price structure.
The VAT reduction -those 15 euro cents- plus that of Hydrocarbons -another 11 cents in the best of cases- would imply that total decrease of about 26 cents per liter. In percentage terms, it reveals a reduction of up to 15% compared to current prices.
Although in the case of Hydrocarbons the flexibility of the Treasury is total, saving the community minimums, in the case of VAT the Government usually alleges the close monitoring established by the EU with respect to changes in this tax. Although in reality other countries, such as Poland, have already applied significant reductions without any reprimands.
Waiting for what the Executive decides, the markets continue to move as they please. The price of oil fell sharply on Tuesday. It did so by 4% to reach around 100 dollars per barrel of Brent. Just a week ago, it was over $130.
Crude oil already falls to 100 dollars
The gap between the evolution of crude oil and that of fuels is increasing every day. Both when they have registered large increases, and when they try to reflect the falls in Brent in recent days. For now, fuels remain at record highs, other than crude.
There are several factors that explain this discrepancy. Influences the price of fuels, other than crude oil. The cost of the distribution chain has increased (15% of the total). In addition, the refining margin rises, which reached a minimum in the pandemic. And, to top it off, the companies have been incorporating the different decisions of the last governments in energy matters, such as taxes or funds, into the costs.
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