MOTORISTS across Spain have been handed a much-needed lifeline after the Spanish government slashed the rate of VAT on fuel.
According to data from the Ministry for Ecological Transition, the average price of petrol at pumps across Spain has fallen from €1.796 per litre to €1.607 – a drop of more than 10%.
The cost of diesel has also plummeted in the wake of the tax cut, falling by 8% from around €2 per litre to €1.786.
That means motorists driving a vehicle with an average 55-litre petrol tank will save between €8 and €10 every time they fill up.
The sharp fall comes after the government unveiled a €5 billion package of measures designed to counter the economic impact of the ongoing war in the Middle East.
That included a proposal to cut the rate of VAT applied to fuel, electricity and gas from 21% to just 10%.
However, the cost of filling up remains well above pre-conflict levels.
Before the outbreak of war in Iran, petrol sat below €1.50 per litre, while diesel hovered at around €1.40.
The price of oil and gas has soared in recent weeks as the conflict continues to spook global markets and raise fears of a catastrophic energy crisis.
Tehran has effectively shut down the Strait of Hormuz, a crucial maritime shipping route through which around 20% of the world’s oil and liquified natural gas passes.
Shipping traffic exiting the Persian Gulf through the strait has been effectively halted and tankers are stranded because of the risk that vessels could be attacked.
US president Donald Trump has threatened to ‘obliterate’ Iran’s fuel and energy infrastructure unless the regime agrees to open the narrow strait.
In response, Teheran has said it will launch retaliatory attacks, raising fears that the conflict could snowball out of control and cause a disastrous economic shock with global ramifications.
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