August, the most expensive month of the last year in Spanish gas stations, has left an extra income for the public coffers. Consumers returned to pay at gas stations throughout the country the figures that were observed in the worst moments of the energy crisis last year, when the Government's discount of 20 cents on fuel still alleviated the impact of the lack of control in the markets. After months of a price truce that in January led the Executive to end the general reduction at the pump, gasoline and diesel resumed their escalation at the beginning of summer until leading to a record August, a month in which the State came to collect in taxes almost one euro more for each tank of gasoline than before the summer season.
The reason for this higher collection is not that the Government has raised taxes on fuels, but is explained by the very nature of the tax burden borne by hydrocarbons in Spain. The final price of diesel and gasoline includes the payment of the Special Tax on Hydrocarbons and VAT. The latter is the one that explains the greater collection of the Treasury for each liter of fuel that the Spaniards have refueled this summer.
The VAT borne by hydrocarbons, of 21%, is levied on the value of the raw material, therefore, when the fuel market experiences an escalation like the one that occurred last summer season, the impact of this tax on the pockets of consumers also increases and, consequently, the contribution of this tax to the public coffers grows.
Filling an average tank of 50 liters of gasoline has gone from 79.65 euros in May to 85.05 euros in August. Thus, the VAT component in the final cost went from 13.85 euros in May to 14.75 euros in August, which is almost one euro more for refueling, according to data from the EU Oil Bulletin and international quotes compiled by the Spanish Association of Operators of Petroleum Products (AOP).
For its part, refueling the same 50 liters of diesel in May had an average cost of 71.35 euros, while last August it was 79.4 euros. If the VAT component is taken into account, it went from 12.4 euros to 13.75 euros, which implies an increase of 1.35 euros.
Compared to the variation of VAT, the item of the Tax on Hydrocarbons remains the same in both cases, since it taxes consumption and not the value of the raw material, in fact, between the months of January and July, the collection of the Treasury for that tax was 7,346 million, 1.4% less than in the same period of 2022. The latest collection report of the Tax Agency, corresponding to last July, still does not incorporate the effect of the strong rebound in crude oil prices in August.
The forecast in international markets is that crude oil will continue its bullish rally until the end of the year. There are several reasons that explain this trajectory, mainly, the production cuts announced by OPEC (a decision that market sources attribute to Saudi Arabia). Different market agents consulted by this means agree that if OPEC maintains the current supply cuts until the end of the year, in a context in which the demand for fuel from Asia remains at current levels, the prices of a barrel of Brent could exceed 100 dollars before 2024, compared to around 91 dollars today.
According to a recent report by Bank of America (BOFA), part of the current situation is explained by the European ban on Russian fuel. "With OPEC in the driver's seat and Asian energy demand recovering, Indian refiners have benefited from sanctions on Russia and Iran by accessing lower-cost crude supplies and exporting expensive products to Europe," said Francisco Blanch, BOFA's global head of commodities and derivatives.
"Now that Saudi Arabia and Russia are implementing joint production cuts in a context of rising demand, the key question for oil prices is when the economic and political interests of the two largest oil exporters will again be misaligned."
Not only Spain is suffering from the rebound in fuel prices. In France, for example, some marketers have declared a cap at 1.99 euros per liter. Market sources do not rule out that interventionist measures may occur again in Spain, either by the marketers themselves, or by the State. Government sources indicate to this media that there is no decision taken on the application of new reductions by decree to fuel and insist that it is a "political decision".