Spain is likely to make changes to the way the government fuel discount is applied from July 1

Right now everyone gets the discount when they pay for their fuel. / on

There are fears that major oil companies will raise prices to make up for the discount, so authorities are looking for ways to ensure those who need it most don’t miss out.

On April 1, the Spanish government introduced a three-month fuel discount to compensate for steadily rising prices. She is now considering what to do from July 1st, and everything points to a change in the way the discount is applied.

At present, petrol and diesel are 20 centimos per liter cheaper than they would otherwise be, with the government funding 15 centimos off and the oil companies paying the other five. However, there are concerns that some companies are taking advantage of the situation and raising their prices to “gobble up” the discount.

One option would be to provide the discount to those who need it most. This is something that was originally suggested, but the Ministry of Finance decided that it would be too difficult to differentiate between users when it came time to refuel their vehicle. However, there are other ways to achieve this, such as applying a retroactive refund or providing some type of voucher to present when paying for fuel.

Veto on Russian oil and gas imports

Fuel prices will continue to rise in the coming months and are not expected to fall again this year. Tension over the war in Ukraine is growing, especially as the European Commission has said it will veto Russian oil and gas imports. The mere announcement of these intentions has an effect on prices: a barrel of Brent was trading at around 106 dollars on Monday, practically at the same level as at the end of March, when the government approved the anti-crisis decree. Indeed, several analysts have said that crude oil, and therefore fuel, will remain between 90 and 120 dollars per barrel during the second half of its year.

The government’s decision will depend to a large extent on the analysis of the National Markets Committee and fuel price competition. At present, the average cost of diesel is 1.91 euros per liter, six centimos more than at the beginning of April. Petrol is currently around 1.88 euros, 3% more than six weeks ago.

The government has warned energy companies that if they raise prices to “absorb” the rebates the measures will be withdrawn on June 30. Nadia Calviño, Minister of Economic Affairs and Digital Transformation, called on all companies, but especially oil companies, to act responsibly, saying “we all have to do our part”.