Diesel to rise 24 cents a litre if government fails to extend fuel tax cut tomorrow

The price of diesel could rise by up to 24 cents per litre and that of petrol by around 6 cents if the government does not extend the fuel tax cut that expires.

1 October marks a possible turning point for drivers' wallets. If the government does not extend the tax cuts on fuels, diesel could become **24.2 cents per litre** more expensive and petrol **6.05 cents per litre**, assuming the other factors influencing the price remain stable and the tax increase is passed on in full at the pump. The reductions currently in force, which expire on Wednesday, are **20 cents** for diesel and **five cents** for petrol.

## The impact at the pump

The final decision is pending the Consejo de Ministros (Spain's cabinet) setting out the new anti-crisis package. President **Pedro Sánchez** announced the extension of measures to cushion the economic consequences, but the specific scope of the fuel tax cuts has not yet been detailed. What has been advanced is the continuation of aid to the agri-food sector, including compensation for the extra cost of agricultural diesel. For the average driver, the end of the tax cut would have a more noticeable effect on diesel. Filling a tank with **50 litres** of diesel could cost **12.10 euros more**, while in a petrol car the increase would be around **3.03 euros**. This calculation is based on the direct tax effect, without taking into account fluctuations in oil prices, distribution costs or retail margins.

## Differences and mechanisms

The disparity in the impact between diesel and petrol is explained by how the safeguard clause works. This measure, approved in June, envisaged a gradual withdrawal of the tax relief during the summer. However, the year-on-year increase in the price of diesel, which reached **15.7%** in July, triggered a reduction of **20 cents** for September. Petrol, meanwhile, kept the five-cent discount set out in the schedule. The Impuesto sobre el Valor Añadido (IVA, Spain's VAT) on fuels already returned to **21%** on 1 July.

## Looking to the future of the sector

While immediate aid is being debated, the **Agrupación Española de Vendedores al por Menor de Carburantes y Combustibles (AEVECAR)** is calling on the government for a more stable framework for the sector's transformation. They are asking for faster transposition of the European renewable energy directive **RED III** and for the new system of renewable fuel targets to enter into force on **1 January 2027**. The industry association argues that this clarity is vital to avoid a competitive disadvantage compared with other countries that will apply the system in **2026**. **AEVECAR** advocates long-term planning that not only reduces transport emissions but also drives investment in renewable fuels.

The association believes that Spain has the potential to be a European benchmark in the production of these fuels, but it links this opportunity to regulatory stability. Clear targets and a reliable forecast of investment needs, in its view, would strengthen legal certainty and the industry's competitiveness. In addition, **AEVECAR** supports the request by the **Asociación de la Industria del Combustible de España** (Spanish fuel industry association) to the Ministerio para la Transición Ecológica (Spain's environment ministry) to eliminate measures that, according to both organisations, impose discriminatory burdens on domestic manufacturers compared with importers. They warn that this imbalance could discourage investment in Spanish refineries and weaken energy independence.