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Spanish petrol stations fail to pass on full fuel tax cut

Spain's OCU consumer group has urged regulators to investigate after 34% of petrol stations failed to pass on the full October fuel tax reduction.

Spanish petrol stations fail to pass on full fuel tax cut

Spain's Organization of Consumers and Users (Organización de Consumidores y Usuarios, OCU) found that a third of petrol stations withheld a full fuel tax cut from drivers.

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A person pumping petrol. Photo: Jesús G. Feria / La Razón

The consumer advocacy group has asked the National Commission on Markets and Competition (Comisión Nacional de los Mercados y la Competencia, CNMC) to investigate after finding that 34% of analysed forecourts had not passed on the full tax reduction three weeks after it took effect.

The fiscal measure took effect on October 1 to help ease the cost of filling up for motorists. It cut Spain's hydrocarbon tax (impuesto sobre hidrocarburos) on petrol by 15 cents per litre, which translates to an expected retail reduction of around 18.1 cents per litre once the effect of Value Added Tax (IVA) is included.

In Spain, retail motor fuels are subject to both a fixed per-litre hydrocarbon excise duty and the standard 21% Value Added Tax, which is calculated on the combined fuel cost and excise duty. Because Value Added Tax applies on top of the hydrocarbon duty, reducing the excise tax by 15 cents lowers the final tax burden at the pump by just over 18 cents per litre.

Delays at automated and low-cost petrol stations

Despite the tax cut taking effect on October 1, the discount was not reflected immediately at every pump. The OCU analysed retail prices reported by filling stations to the online geoportal run by Spain's Ministry for the Ecological Transition (Ministerio para la Transición Ecológica) and identified significant gaps between the expected reduction and the prices charged to drivers.

By 14:00 on the first day the measure was in force, pump prices had dropped by less than 15 cents per litre at 24% of the petrol stations examined. Another 28% of stations had not reported any price change at all by that time.

According to the OCU, delays in applying the discount were most common at automated unmanned stations, low-cost fuel chains, and forecourts linked to certain supermarkets.

Under Spanish energy regulations, all retail fuel stations are required to report price changes to the Ministry for the Ecological Transition for publication on its public geoportal. Founded in 1975, the OCU is an independent non-profit consumer organisation in Spain that regularly monitors retail energy, banking, and grocery prices.

Fuel price discounts by brand across Spain

Several major fuel brands passed on all or most of the tax cut from the first day. By October 8, national operators Repsol, BP, Moeve, Galp, Shell, Petronor, and Campsa, along with the Catalan chain Petrocat, had updated prices across almost their entire networks.

At those major networks, the average price reduction reached 17.9 cents per litre by October 8, close to the 18.1 cents per litre expected from the tax change alone.

Disparities between chains remained visible three weeks later, even after wholesale fuel prices fell on international markets starting on October 1. Using diesel, which did not undergo any tax changes, as a benchmark, the OCU estimated that lower market prices contributed an extra reduction of 4 cents per litre, meaning the combined drop for petrol could approach 22 cents per litre.

By October 22, however, the total discount still had not reached 18 cents per litre at 34% of the petrol stations analysed. The OCU recorded a reduction of around 12 cents per litre at Beroil and 14 cents per litre at GMOil, while stations operated by the Basque supermarket chain Eroski and other brands presenting themselves as low-cost passed on savings of around 15 cents per litre.

At the other end of the market, several operators passed on both the tax cut and the wholesale decline. The agro-food cooperative BonÀrea reduced prices by 24 cents per litre and BP cut them by 22 cents, while Repsol exceeded 21 cents and Campsa, Tamoil, and Petronor hovered around 21 cents per litre. Moeve, the Spanish energy group formerly known as Cepsa, and hypermarket chains Alcampo and Carrefour recorded reductions of around 20 cents per litre.

Competition watchdog investigation request

The OCU said it was concerning that a measure funded with public money to relieve household spending was not passed on in full and immediately to all consumers. The organisation argued that cost increases usually reach final pump prices quickly, whereas cost reductions often take longer to reach drivers.

In response, the group formally asked the CNMC to investigate the pricing cases it detected. The CNMC is Spain's independent public competition and regulatory authority, responsible for enforcing antitrust law and supervising the energy market.

The OCU also advised motorists to compare prices before filling up, noting that price differences between stations can significantly affect the final cost of a tank.

Petrol and diesel prices in Spain compared with last year

The dispute over the tax cut comes as filling up remains expensive for Spanish drivers compared with a year ago. Although petrol has recorded five consecutive weeks of declines and costs nearly 11% less than at the beginning of October, retail prices remain higher than at the same point last year.

According to the latest figures from the European Union Oil Bulletin (Boletín Petrolero de la Unión Europea), filling an average 55-litre tank of petrol in Spain now costs 95.09 euros. That is 13.58 euros above the 81.51 euros recorded during the same period a year earlier.

Diesel remains even more expensive for motorists. Filling an average 55-litre tank of diesel now costs 104.39 euros, which is 26.79 euros more than the 77.60 euros it cost a year ago, and diesel prices rebounded by 0.58% over the latest week after four consecutive weeks of declines. Published weekly by the European Commission, the European Union Oil Bulletin tracks average retail pump prices across member states.

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