Monday, September 25

Guide not to go crazy with the price of gasoline: how help works and where to refuel cheaper

The price of gasoline and diesel is one of the current issues in the automobile market. Its fluctuations and, especially, its price increase in recent months it has caused the Government to even subsidize part of its final price. To understand what is happening with a global perspective, here is a guide with the most important issues related to the price of diesel and gasoline.

Below, you will find the daily price of fuels, what affects them and what are the latest movements and trends that we can expect or where you can find the cheapest gasoline or diesel.

Gasoline and diesel prices

Every week, the European Union publishes a report detailing the half price to which the final consumer pays gasoline and diesel in each country. To offer these figures, the data sent weekly by the Governments is used and possible bonuses are included in them, such as the current subsidy of 20 cents/liter that is applied in Spain.

According to the latest report, SP 95 gasoline is paid at 1,837 euros/litre, while diesel is paid at 1,873 euros/litre. This data, however, may be slightly out of date, as it is analyzed on a weekly basis. If you want to know the current average price at which fuels are paid in our country, the website makes a detailed daily report in which the data is even crossed with the price of the Brent Barrel.

The market

But what is causing the price of diesel and gasoline to be in historical highs? Here you have to take some variables into account. In the first place, the Brent Barrel is trading high. Very expensive, but in recent days it has been positioned between 110 and 100 dollars per barrel.

It is a price that is still far from the $129.49 that was paid at the beginning of March. Then it was said that it could climb to $200 if Russian oil was removed from the equation. Today, when the veto is closer than ever, these values ​​have not been reached, but the final price that consumers pay has.

Dimitry Anikin Atyawsn Nse Unsplash

The price of the Brent Barrel and the final price of gasoline are usually linked, but it is not decisive. It must be taken into account that the final price must include the taxes that we disburse with each liter of fuel and other types of costs for the oil companies, such as the logistical expenses that they have to make, the so-called “invisible costs“.

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The Spanish Association of Operators of Petroleum Products (AOP) collected in February that, of 50 euros of fuel, 21.9 euros were taxes and that the cost of raw material and marketing added another 27.4 euros of the total. According to AOP, the wholesaler’s gross margin is 0.7 euros/litre.

However, these data are not maintained over time. It must be taken into account that, as the Special Tax on Hydrocarbons is fixed, the weight of the rates levied on fuel decreases with each increase.

The subsidy of 20 cents/liter

The rise in fuel prices has caused the Government to take a unprecedented measure in our country: subsidize the price of fuel with 20 cents/liter.

The measure began to be applied on April 1 and, in principle, will last until June 30. This came after a transporters’ strike, pressure from the opposition and the application of similar measures in other European countries.

The application of this aid has not been exempt from controversy. And it is that of the 20 cents/liter, 15 cents are paid by the State and the remaining five cents must be provided by the service station. A measure that caused some gas stations to warn of possible closures due to the impossibility of advancing this money. According to these companies, the monetary advance that the Government would pay them would not be enough to guarantee the application of the measure.

In addition, from the first moment, the State notified the gas stations that the CNMC would closely monitor possible increases in the price as the days went by. More than a month later, citizens are paying more money than before the subsidy, despite the fact that the price of the Brent Barrel has fallen and, subsequently, has not risen at the same rate.

This has motivated the Government to drop the possibility of withdrawing the subsidy on June 30, not have been effective, and along the way has pointed to the oil companies as the cause. A report by El País estimated the increase in the profits of these companies between 11 and 21% from 2013 to 2020. The gas stations, for their part, defend themselves by assuring that this profit has barely grown by 2%.

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As for its practical application, the final price of the fuel without the corresponding subsidy is indicated on the information signs at the gas station. This is only seen on the final ticket, where the temporary reduction in the price of gasoline and diesel is specified. I mean, even if you don’t see it, it’s there.

Nigel Tadyanehondo God2mdnujuu Unsplash

Aid to carriers

Although finally the subsidy of 20 cents/liter has reached all drivers, the fuse that lit the final movement of the Government was a truckers’ strike which even left images of empty shelves and companies that could not guarantee the supply of their products.

After days of fighting between the Government and the first conveners, most of the associations that joined the strike ended up lifting it with the promise that the State would finance part of the price of fuel. But, in addition, a series of direct aids were included, which in total could never exceed 400,000 euros:

  • Trucks and heavy vehicles: 1,250 euros.
  • Buses: 950 euros.
  • Vans and light vehicles: 500 euros.
  • Ambulances and medical transport: 500 euros.
  • Taxis and VTC: 300 euros.

Furthermore, we must not forget that transport professionals can also deduct the entire VAT on fuel throughout the year, when submitting the income tax return. The same happens if they acquire a new vehicle for the exercise of their trade.

It's official: diesel is more expensive than gasoline.  It is the final death of an entire era

How to find the cheapest gas stations

With the price of diesel and gasoline soaring, the search for the cheapest gas station has become something of “the gold rush of today”.

For save money a little money with each refueling, our colleagues from Xataka Basics have made a guide in which they explain, step by step, how to find the cheapest gas station, regardless of where we are.

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The simplest thing is to use the Google Maps application, because with our position we will quickly find the closest service stations and their prices. But as recalled in the aforementioned guide, it is also possible to opt for specialized and very detailed pages. This option is really interesting if we are going on a trip and want to plan where to stop.

what do we expect

The forecasts of what we will find in the coming weeks and months (who knows if years) are not at all encouraging. In March, removing Russian oil from the equation was a possibility and, in May, it is more alive than ever. In fact, in the absence of final approval, the project so that Europe does not consume Russian crude end of the year it’s already on the table. And that Russian oil represents 25% of what European countries consume.

This has caused greater pressure on the international oil market. The United States has even approached Venezuela and its companies have increased purchases in Ecuador. Libya is going through a political crisis with harsh clashes that has lowered (and even eliminated) oil exports. And the OPEC countries assure that they will not increase production, which is already below expectations.

Wassim Chouak Kjcakwth6u4 Unsplash 1

For now, both Europe and the United States have released part of their energy reserves of crude but these are not enough to feed a market that is desperately looking for a way to replace the barrels that until now were bought from Russia.

Taxes are usually the first mentioned, but it must be remembered that Spanish rates are slightly above those that the European Union marks as mandatory, so the margin of action is limited. In fact, only Cyprus and Poland apply rates significantly lower than the Spanish. In addition, a reduction in this sense would send an anti-ecological signal at a time when the continent’s institutions have embarked on a crusade against the combustion vehicle.

Photos: Dimitry Anikin, Nigel Tadyanehondo and Wassim Chouak

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