2023-10-05 19:35:47
The change in fuel prices at service stations this summer was seen by the Government as an additional point of pressure given the end of aid to combat inflation, which expires on December 31. At least, this week, a part of those prices have given a small respite following the more or less downward evolution that oil has marked in recent weeks. The cost of gasoline has fallen in the last seven days for the first time in three months, crude oil remains below the highs it set in September and only diesel is moving at its own pace with an increasingly higher price.
That is the X-ray that the Executive currently has facing the last quarter, in which it must decide – either the current Cabinet in office, or the one that is constituted if there is definitively an investiture of Pedro Sánchez – on the extension of the aid. to combat inflation. If the barrel of Brent moves in the range between 80 and 90 dollars, it will minimize the need to activate discounts at gas stations for certain groups. This Wednesday, the price of Brent closed at 85 dollars.
The impact of fuels on the economy as a whole is one of the risks that Spain has in determining its economic evolution and that of inflation with strong links in the prices of gasoline and diesel. This week gasoline has shown its first sign of stopping the spiral into which it had entered throughout the summer. It has done so timidly, yes, barely 0.45%, up to an average of 1.75 euros, although it has thus broken the escalation that was straining drivers’ pockets, according to the latest EU Petroleum Products Bulletin.
The same does not happen with diesel, which still continues to increase in price and is increasingly approaching that of gasoline, even though it is subsidized in taxes with up to ten euro cents per liter. This last week, automotive diesel has become more expensive by another 0.1% to 1.687 euros per liter, a level that has not been seen since the end of January.
With the decrease in gasoline, an upward trend that had led to an increase of more than 10% since July ends. However, diesel continues in this unstoppable race of increases since the summer began and has already accumulated an increase of 17.3% in the last three months.
Furthermore, the price of both fuels is broadly consolidated above the levels at which it was before the outbreak of the war in Ukraine due to the Russian invasion, which began on February 24, 2022 and which, in the case of diesel, It was 1,479 euros per liter and for gasoline, 1,594 euros. In any case, they have not reached, despite this upward trend in recent months, the highs they registered more than a year ago; It was in July, when gasoline reached 2,141 euros and diesel 2.1 euros.
If they continue at these levels, the Government would rule out expanding aid to drivers who refuel, such as the 20 euro cents that was established from March to December of last year on a general basis. The Executive continues to study what measures to extend from January 1, 2024, which is when the current million-dollar support program to combat the crisis expires. The economic vice president, Nadia Calviño, has limited herself to underlining in this regard in recent days that “between now and the end of the year” the measures considered most appropriate will be taken, “always thinking about a responsible fiscal policy and the best use of public resources.
Black gold is contained
The relaxation of gasoline is explained by the costs of petroleum products, a drop that has been more pronounced than that of diesel. The barrel of Brent was trading around $86 this Thursday, although last week it began to decline from the $95 it reached close to seven days ago. The cost reduction comes after OPEC+ (the cartel’s partners along with other large crude oil producers) chose to maintain the cuts in their exports until, at least, the end of the year.
That production deficit should increase the price. However, the fear of a slowdown in demand is weighing much more heavily in the context of “high rates for longer” announced by central banks, both the ECB in the euro zone and the FED in the US.
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