Spain's tax cut makes its petrol the cheapest in Europe
The government's tax cut has brought petrol down to €1.557/l, among the cheapest in the EU. But the ranking is misleading: several countries still have it even cheaper.
English · Original discussion in Spanish · Published
The cheapest petrol in Europe (with honours)
The Spanish government has cut short the surge in fuel prices with a tax cut that, according to the EU Oil Bulletin, has brought the average price of a litre of petrol down to 1.557 euros. That is 17 cents less than the previous week and, on paper, makes Spain the country with the cheapest petrol in the European Union. But the headline, as so often, hides more than it reveals.
Spain, the cheapest... except for half a dozen
The fine print of the report reveals that Spain is the cheapest "only behind Hungary, Slovenia, Bulgaria, Malta and other countries". In other words, it is the seventh or eighth cheapest, depending on how you count. Malta, with its fixed subsidies, keeps the litre at 1.340 euros. And when it comes to diesel, Spain is the sixth most affordable. The wordplay in the original news story —which credits Spain with the lead in cheapness— is an exercise in creative journalism that would not survive even a quick scan.
The tax mirage
The tax cut has been welcomed by some and slammed by others. On the one hand, those who defend state intervention point out that it has halted the surge triggered by the war in Iran and that, in absolute terms, prices have fallen. On the other, critics point out that the taxes now being cut are the same ones that were raised before, and that the savings will be paid for with debt or future hikes. The comparison with the United States, where a litre costs 1.141 euros, fuels the scepticism: taxes there are far lower, and purchasing power is higher.
Miracle cure or temporary patch?
The measure has had an immediate effect at the borders: Portuguese and French drivers are crossing over to fill up their tanks, taking advantage of the price difference. But the consensus among the most measured analyses is that this is a stopgap solution. The real price of fuel depends not only on taxes, but on crude oil, logistics and oil companies' margins. And as long as public debt keeps growing, someone will have to foot the bill. The question that remains is whether this "cheap" petrol is a poisoned gift or a welcome reprieve.
Related discussions in the forum
The Spanish government has cut short the surge in fuel prices with a tax cut that, according to the EU Oil Bulletin, has brought the average price of a litre of petrol down to 1.557 euros. That is 17 cents less than the previous week and, on paper, makes Spain the country with the cheapest petrol in the European Union. But the headline, as so often, hides more than it reveals.
Spain, the cheapest... except for half a dozen
The fine print of the report reveals that Spain is the cheapest "only behind Hungary, Slovenia, Bulgaria, Malta and other countries". In other words, it is the seventh or eighth cheapest, depending on how you count. Malta, with its fixed subsidies, keeps the litre at 1.340 euros. And when it comes to diesel, Spain is the sixth most affordable. The wordplay in the original news story —which credits Spain with the lead in cheapness— is an exercise in creative journalism that would not survive even a quick scan.
The tax mirage
The tax cut has been welcomed by some and slammed by others. On the one hand, those who defend state intervention point out that it has halted the surge triggered by the war in Iran and that, in absolute terms, prices have fallen. On the other, critics point out that the taxes now being cut are the same ones that were raised before, and that the savings will be paid for with debt or future hikes. The comparison with the United States, where a litre costs 1.141 euros, fuels the scepticism: taxes there are far lower, and purchasing power is higher.
Miracle cure or temporary patch?
The measure has had an immediate effect at the borders: Portuguese and French drivers are crossing over to fill up their tanks, taking advantage of the price difference. But the consensus among the most measured analyses is that this is a stopgap solution. The real price of fuel depends not only on taxes, but on crude oil, logistics and oil companies' margins. And as long as public debt keeps growing, someone will have to foot the bill. The question that remains is whether this "cheap" petrol is a poisoned gift or a welcome reprieve.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (25 replies).
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