DRIVERS across Spain will receive a major boost at the pump today as the government’s diesel tax cut jumps to 20 cents per litre – four times the reduction originally planned.
The measure came into force on September 1 after diesel prices surged by 15.7% in July, triggering a clause in the government’s anti-crisis package linked to the ongoing war in Iran.
The 20-cent cut will apply at forecourts across the country throughout September, while drivers of petrol vehicles will receive the 5-cent discount originally planned.
But while the tax reduction will offer some welcome relief, the latest figures have shone a light on just how much more expensive filling up has become.
Diesel prices have continued to climb for eight consecutive weeks, with the latest weekly increase adding another 1.76% to the cost of an average litre.
Petrol, meanwhile, has risen by a further 1.07% per litre.
In total, diesel is now around 31 per cent more expensive than it was when the conflict began in the spring, while petrol has risen by around 17 per cent.
For drivers, that means the government’s generous new discount is being rapidly swallowed up by the wider surge in fuel prices.
An average 50-litre diesel tank now costs around €93, compared with just €70.35 during the final week of August last year – representing a difference of almost €23 per fill-up.
Even after taking the new 20-cent discount into account, the same tank is still around €12.70 more expensive than it was a year ago.
Petrol drivers have faced a similar squeeze with a 50-litre tank now costing around €86, meaning filling up is now almost €10 more expensive compared with twelve months ago.
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Spain does, however, remain one of the cheaper places in Europe to fill up, with both petrol and diesel prices still below the EU average.
For drivers looking for a further discount, crossing into neighbouring Gibraltar could offer another option, with the Rock continuing to benefit from cheaper prices at the pump.
The difference – around €0.49 per litre last week before the new tax discount was implemented – remains despite the post-Brexit treaty signed earlier this year, which was designed to bring differing tax arrangements across the border closer together.
The price gap remains largely because Gibraltar has been handed a three-year exemption from fuel excise duty under the terms of the new UK-EU treaty.
The agreement, which creates a bespoke customs union between Gibraltar and the EU and removes checks at the land border, is intended to gradually harmonise Gibraltar’s famously liberal tax system with Spain’s.
As a result, excise duties on fuel, alcohol and tobacco will eventually be required to come within 6% of the rates charged in Spain.
However, the change will not happen until the end of the three-year transition period, meaning drivers in Gibraltar are set to enjoy cheaper fuel for some time.
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