How is it possible that gasoline is at its all-time high if oil has not yet reached it?

We are approaching 2 euros per liter of gasoline. A historical price. The highest ever seen. However, the price of oil was higher in 2008, when a barrel of Brent exceeded 140 dollars in the midst of the financial crisis. It is not ruled out that this barrier will be overcome these weeks, but it is striking how the price of gasoline breaks records, while that of oil has not yet. What accounts for this difference? We explain it to you.

Closely linked but not the same. The price of gasoline and oil are closely linked. When one goes up, the other goes up, but there is also disparity in percentages and final price level. The price of fuel depends on multiple factors beyond the price of oil itself. This includes taxes, margins and the cost of logistics.

Unfortunately for our pockets, when the price of oil plummets, it is not so clearly represented in the price of gasoline. It happened last year during confinement. While the barrel of Brent plummeted 60%, gasoline only fell 17% according to data from the European Union Petroleum Bulletin.

What are the “invisible costs”. With a similar crude oil price cost, gasoline prices today are much higher. This is justified by the new taxes that are applied. They are popularly known as “invisible costs”, those that do not have directly to do with logistics or production, but are related to legislative matters such as penalties for the benefit of less polluting energies and special taxes.

There are no official updated data from the National Markets and Competition Commission (CNMC). To find out how taxes are applied, we have the report from the Spanish Association of Petroleum Product Operators (AOP), which explains that 49% of what is paid in Spain per liter of gasoline are taxes. 35% are wholesale costs and 16% are margins and distribution costs.

There is no consensus on gas station margins. According to the latest data from the CNMC collected by El País, from 2013 to 2020 the concept of net profit of gas stations went from 11% to 21%, which includes operating costs of service stations and regulatory obligations. According to the employers of gas stations, their benefit is only 2% of what is paid. The difference in the price of gasoline, however, is very different between one gas station and another, being even greater between the different autonomous communities.

The Special Tax on Hydrocarbons on biofuels and other changes since 2008. In 2008, when Brent reached its maximum, there was no series of taxes that exist today in Spain. For example, in October 2014, the National Fund for Energy Efficiency was created, which applies to large operators. Its impact on the final price is estimated at around 2.4 cents per liter of gasoline.

There was also the Special Tax on Hydrocarbons on biofuels, where a tax of 48 euros was established on every 1,000 liters of diesel or gasoline. That is to say, an impact of almost five extra cents per liter.

In the 2018 budgets, it was finally decided to apply a single special tax, where in all the Autonomous Communities a tax of 7.2 cents per liter is paid. The same amount for gasoline and diesel that has not changed since then.

In Spain we pay 5% less tax on gasoline than the European average. According to the latest data from a report by the European Commission, taxes in Spain represent 47% of the price of gasoline, down from 57% in 2018. This is 5% less than the European Union average (52 %). According to this study, with each liter of gasoline paid at €1.59, some 75 cents are collected in Spain.

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