high prices are here to stay

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After hitting the ceiling with its historical maximums, gasoline prices begin to decrease. The latest weekly report from the European Union reflects this, with an average drop for our country of 1.68% for gasoline and 1.10% for diesel. We will have to wait if we are facing a slow decline or a stabilization that sets prices at a new standard.


The last update. Every Thursday, the European Commission publishes the average prices of the countries of the Old Continent. After weeks of continuous uploads, prices have dropped again very slightly. The report sets the average price of Spanish fuel at 1,813 euros/liter for gasoline and 1,798 euros/liter for diesel. A week ago we were at 1,845 euros/liter of gasoline and 1,817 for diesel. That is, we pay two and three cents less per liter than days ago.

rocket and pen. What we are experiencing is the basic theory of the rocket and the pen. It is a very simple economic theory. Prices go up very fast, like a rocket, but they go down very slowly, with the weight of a feather. This is because the price of the Brent Barrel experienced a very rapid price escalation that the service stations passed on to consumers. However, although its price has fallen, this fall is not reflected in the same proportion.

The price of the barrel. Without reaching historic highs, the rise in fuel prices has been closely linked to this value. The barrel of Brent, which has reached 140 dollars per unit, has lowered its prices in recent days, with minimums that have once again placed it below the $100/barrel barrier. In recent days, however, it seems to have stabilized at $120/barrel.

Inflation. One of the most obvious consequences of the rising cost of fuel and other raw materials has been the growth of inflation, which has even caused long queues at service stations. This has been estimated at 7.6% and may be the key to check whether current prices will continue to fall or, however, will become common figures when, from now on, we have to fill the deposit.

Discontent. Although the pressure on fuel prices seems to be lost, the general discontent and, more specifically, the transport strike continues. The price of fuel has been the main trigger for us to have been witnessing a transport strike for a week and a half, with breakdown of the supply chain in some companies and with sectors joining, such as fishing or taxis.

Interventions. The rapid rise in fuel prices has led countries such as France, Portugal or Ireland to take their own measures so as not to affect professionals and citizens with these increases. In Spain, the Government has not yet fulfilled its promises and has put 500 million euros on the table for carriers to defray this problem, although it has not offered more details of how this aid will be delivered. The latest developments point out that the Government has offered aid of up to 0.30 euros/liter to carriers, but at the time this text is being written, there is no agreement.

The rise in fuel prices resurrects an old debate in Europe: touch or not touch the speed limits

Who is wearing it?. Here comes another debate. Although taxes are the first mentioned by some sectors, the truth is that with each increase in the price of fuel, they lose weight on the final price. This is because VAT does increase its collection if the price increases, but not the Special Tax on Hydrocarbons, which has a permanent rate fixed, whatever its price. The CNMC points out that, between 2013 and 2020, service stations increased their net profits from 11% to 21%. The gas stations, for their part, point out that this is barely 2%.

After hitting the ceiling with its historical maximums, gasoline prices begin to decrease. The latest weekly report from the European…

After hitting the ceiling with its historical maximums, gasoline prices begin to decrease. The latest weekly report from the European…

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