Currently, the diesel It’s about nine cents cheaper than gasoline. This is essentially because it enjoys lower taxation compared to gasoline. However, that advantage should disappear in 2025. It will not be the first of January, but beyond the first quarter.
When will the price of diesel go up? Will it also rise for professionals? Why this rise in diesel after decades? We answer these and more questions so that the call diesel tax don’t catch you off guard.
Diesel tax: when and how
Why is diesel cheaper today? Diesel has been cheaper than gasoline for several decades in almost all of Europe. The reasons are essentially lower taxation in favor of diesel.
In Spain, both diesel and gasoline are subject to a VAT of 21%, the Retail Sales Tax and the Special Hydrocarbons Tax (IEH). The price advantage of diesel occurs in the latter. Although in gasoline it is €0.472/l for 95 unleaded gasoline and €0.505/l for 98, it is €0.379/l for diesel. Diesel has an advantage of almost 10 cents over 95 unleaded gasoline.
The reasons for this have evolved over time. Whether due to their importance in road transport, the fact that diesel vehicles consume less fuel – contributing to reducing the purchase of hydrocarbons in periods of oil crisis – or, in the first 20 years of this century, due to their low CO2 emissions compared to gasoline, there was always an explanation to justify its low price obtained thanks to lower taxation.
Why will the price of diesel go up in 2025? The rise in the price of diesel is closely linked to pressure from Brussels for Spain to return to the budgetary control set by the EU after the years of laxity due to the pandemic. Furthermore, the fifth payment of the Next Generation aid funds, which amounts to 6.5 billion euros, is subject to compliance with this budgetary control.
In other words, Spain has to reduce its budget deficit if it wants to receive EU aid. And to achieve this you have to reduce spending and obtain more income. Among the measures aimed at raising more is the equalization of the IEH between gasoline and diesel. Equalizing the IEH of diesel with that of gasoline would provide an additional 1.5 billion euros to the public coffers.
When is diesel expected to rise? The forecast is that the increase will occur throughout 2025. In the last Council of Ministers on December 23, the Royal Decree that allowed the increase in the IEH for diesel was to be approved, but it could not be. For 2025, the Government has approved the extension of the General State Budgets. However, negotiations with its government partners to be able to include this increase in the IEH for diesel are difficult.
How much is diesel going to rise? With the equalization of the Special Hydrocarbon Tax on diesel with that on gasoline, a total increase of between 10 and 11 euro cents per liter of refueled diesel is expected. And the applicable VAT is calculated with the price of fuel once the IEH has been applied. Thus, this would imply an increase of almost 6 euros to fill an average 50-liter tank.
Will there be exceptions to the increase? In principle, this increase will not affect transporters or professionals who use subsidized B diesel, with the aim of protecting the competitiveness of the sectors that depend intensively on this fuel and not having a rebound impact on an increase in inflation. And if the price of transportation increases, so would the price of the goods transported, that is, something as basic as the shopping basket would also rise.
However, the Government is silent about professionals who need a vehicle for their work but cannot use B diesel, such as electricians, plumbers, taxi drivers, VTC, commercial representatives and countless professionals who depend on the car.
Source: www.motorpasion.com
