Gasoline prices: are you getting the full tax break?
Drivers in Spain have been feeling the pinch at the pump for weeks, but a recent government intervention aims to ease the burden. A 10% VAT reduction on fuel has been approved, but are gas stations actually passing on the savings? We're breaking down what you need to know to verify you're getting the correct discount.
Understanding the new tax relief
This isn't the first time the government has stepped in to address rising fuel costs. Recall the 20-cent per liter bonus introduced after the war in Ukraine—a universal measure. This new approach is fundamentally different. Instead of a direct bonus, the VAT rate has been slashed from 21% to a reduced 10%, and the Special Hydrocarbon Tax (IEH) has also been lowered. The goal? To ensure consumers directly benefit from the tax reduction.
Initially, the government projected this change would translate to a 20-30 cent per liter reduction at the pump. However, current prices haven't fully reflected this anticipated drop, largely due to continued upward pressure from international oil markets. The price of gasoline 95 has jumped from 1.475 euros to 1.554 euros per liter, and diesel currently sits at 1.788 euros per liter – a direct consequence of Brent crude futures trading above $107 per barrel and rising wholesale costs.
How to check your receipt
The key to verifying the discount lies in your purchase receipt. For gasoline, you should see a reduction of roughly 15-25 cents per liter compared to the displayed price at the pump. Diesel, being less heavily taxed, should show a smaller reduction, around 10-20 cents per liter. But this isn’t the whole story.
The Special Hydrocarbon Tax (IEH) is where things get a little more complex. While the VAT reduction is visible, the IEH decrease is not explicitly listed on your receipt. The government has lowered the IEH from 0.38 euros per liter for diesel and 0.47 euros for gasoline to a minimum EU-allowed 0.33 and 0.35 euros, respectively. This silent adjustment is a crucial component of the overall savings.
A farmer's frustration
The situation isn't sitting well with everyone. Francisco José, a local farmer, voiced his concerns: “I don’t understand why they don't cap diesel prices or eliminate the 21% VAT after this latest increase.