Fuel prices soar in Balearics

The price of a litre of petrol 95 in the Balearic Islands yesterday was 1.66 euros, more than ten cents above the national average of 1.55 euros per litre. Petrol 98 reached 1.81 euros per litre and diesel 1.55 euros (1.7 euros and 1.44 euros respectively in Spain as a whole).

Among the main global conditioning factors that explain the increase in prices are the geopolitical tensions due to the conflict between Russia and Ukraine and a general reactivation of economic activity after the pandemic, which has boosted demand. In the case of the Balearic Islands, paying a higher energy bill is another of the costs of a poorly compensated insularity.

Joan Mayans, president of the Association of Service Stations in the Balearic Islands (AESBA), says that the effects of this upward trend are constraining activity at petrol stations. "For us it is very negative because the more fuel rises the less we sell. What we want is for it to be lower so that consumption is encouraged," he says.

The sector suffered a brutal slump in activity with the first phase of the pandemic in 2020, coinciding with the most restrictive part of lockdown. Turnover began to recover to more or less normal levels from the second quarter of 2021 and this continued until the end of the year, although it did not reach the pre-pandemic figures. Mayans' reading is that many people who are not forced by work or other force majeure conditions are opting to limit the use of their vehicle as much as possible, either by foregoing certain trips or making them by public transport.

"There are people who, for work reasons, have no choice but to continue refueling normally, but many other people are changing their habits. These prices don't help us to sell.” And the worst thing is that the current forecasts are that the upward trend will continue throughout 2022. Spain has the highest gasoline prices, but they are compensated by the lowest tax burden in the Eurozone. Fifty percent of the price of gasoline goes to taxes, while only 2 percent goes to the filling station. The remaining 48 % is split between raw material and distribution costs. "Insularity makes us less competitive. We would need the Special Regime of the Balearic Islands (REB) to be approved now and to be able to compensate these inequalities just as the Canary Islands do", Mayans claims.

Road transport companies of goods and passengers and transport agencies and car rental will have no choice but to pass on this increase in their rates. This is assured by the President of the Balearic Transport Business Federation (FEBT) , Salvador Servera, who explains that they are currently working with the Ministry of Transport to ensure that this price update is automatic and does not have to be at the discretion of the companies themselves.

Regarding the competitive disadvantages of the Balearic Islands, Servera aligns himself with Mayans in calling for an REB that can alleviate the disadvantages of insularity. "Not only do we always top the price list, but carriers that are direct competitors such as those from Murcia or the Valencian Community also have the cheapest gasoline in Spain."