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Thursday, April 25, 2024

Fuel prices drop below pre-discount level

The average fuel cost for a liter of gasoline has fallen this week by 1.63% and that of diesel by 2.41%.

The average price of fuels has continued to fall this week, with a reduction of up to 2.4%, and is already below the levels set when the 20 cents per liter bonus was adopted at the end of March to deal with the impact of the crisis due to the outbreak of war in Ukraine on its price increase.

Specifically, the average price of a liter of gasoline has fallen this week, for the fourth consecutive week, by 1.63% to fall back to 1.680 euros, its lowest level since mid-April, according to data from the European Union Oil Bulletin collected by Europa Press.

In the case of diesel, it has registered a decrease of 2.41%, falling for the third week in a row, to stand at 1.822 euros, its lowest level since the penultimate week of August. In this way, both fuels move further away from the highs they reached this summer, when in July they reached 2.141 euros for gasoline, and 2.1 euros for diesel and are below the levels from before the introduction of the fuel bonus –1.818 euros per liter in the case of gasoline and 1.837 euros for diesel-.

Seven weeks in a row

However, the average price of a liter of diesel in Spain remains for the seventh consecutive week above that of gasoline, with a gap of just over 14 cents. This average price for both fuels includes taxes, but does not reflect the discount which came into force on April 1st of at least 20 cents per liter, since there are higher discounts, depending on the oil company and promotions for loyal customers.

Taking into account this subsidy, the price of a liter of gasoline would be 1.480 euros, while that of diesel would be 1.622 euros, in both cases clearly lower than the price at the end of March, before the aid came into force. In spite of the lower prices recorded in recent weeks, fuel prices are still particularly high compared to recent years at this point in the year.

Thus, compared to the same week a year ago, the average price of a liter of gasoline is 14.5% more expensive, while in the case of diesel it has risen by almost 41.2%, although without taking into account the subsidy currently in force. Taking the subsidy into account, the price of a liter of gasoline is 3% more expensive than a year ago, while the price of diesel is 25.7% higher.

The impact of the war on fuel prices

These figures are recorded in an environment of high crude oil prices in the current context, marked by the war in Ukraine. However, on Thursday, Brent crude, the European benchmark, was trading down to $86.9 a barrel, while American Texas was trading at around $81.

The price of fuel depends on many factors, such as its specific price (independent to that of oil), the evolution of crude oil, taxes, the cost of raw materials and logistics and gross margins. In addition, the evolution of crude oil prices is not directly passed on to fuel prices, but rather with a temporary offset.

At these levels, the price of 95 unleaded gasoline in Spain remains below the European Union average, which stands at 1.737 euros per liter, and the Eurozone, with an average price of 1.807 euros. In the case of diesel, the price in Spain is higher than the EU average, which is 1.806 euros, but lower than that of the Eurozone, with a price of 1.841 euros.

However, including the bonus of at least 20 cents per liter, the price of both fuels in Spain would be below the European average.

For the full article, please visit Diario de Ibiza website here.

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