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ARCHIVED - Spain considers extending fuel and energy subsidies as petrol prices hit 2 euros/litre
A litre of petrol in Spain is now 25% more expensive than before the invasion of Ukraine
The President of the Spanish government, Pedro Sánchez, assured this week that he is open to extending crisis measures, such as the 20 cent fuel discount, beyond the June 30 expiry date. He explained that the Ministry of Finance and the nation’s economic team are all working on the extension of the anti-crisis measures introduced as a response to the war in Ukraine.
Despite the fuel bonus implemented in April to stem the staggering rise in fuel costs, filling stations across Spain have continued to hike up their prises, and the cost of a litre of petrol has exceeded 2 euros for the first time ever. This, coupled with 8.7% inflation in May, has left no industry safe from the far-reaching impact of the Russian invasion.
To counteract the ever-increasing cost of raw materials and energy, the government is looking at extending the tax rebates on the price of electricity, specific aid to sectors such as transport, agriculture and livestock, expanding the social bond to more vulnerable households and maintaining the 20 cent per litre fuel discount.
“This government launched all the measures to protect families, companies [and] the country, in a time as difficult as the pandemic and we are going to do the same, everything in our power, to protect our economy, companies, industry and families now,” the president stressed.
The Bank of Spain has already warned that a continuing conflict will have a serious impact on Spain’s GDP this year, and the decision by Europe to impose further sanctions on Russia by implementing a partial embargo on oil imports will likely have a further knock-on effect. However, Spain and Portugal have recently agreed on the so-called ‘Iberian Exception’ with Brussels to cap the cost of natural gas, which should significantly reduce electricity bills in the coming months.
Despite the subsidies, on June 1 the price of petrol has leaped up to 2.05 euros per litre, 25% more than when the war in Ukraine began.
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