Spain’s National Commission for Markets and Competition (CNMC: Spanish acronyms for Comisión Nacional de los Mercados y la Competencia) has issued an Information Bulletin regarding the government-approved subsidy on a litre of petrol and its transfer to the consumer.

20 September 2022

Background information:

The Spanish government, through Royal Decree-Law 6/2022, establishes that service stations will receive a rebate of 20-euro cents per litre of fuel, which will be returned to them by the Administration. This obligation was initially established for the period April-June 2002 and has been extended with Royal Decree-Law 11/2022 until December 2022.

Monitoring by the CNMC:

The CNMC monitors service stations/gas stations to verify the effectiveness of the rebate for consumers. In this regard, it collaborates with other administrations by providing sales data; verifying the number of discounts granted by operators; supervising the effectiveness of the discount for consumers; and reporting cases that should be reported to the inspection of the administrations responsible for ensuring the effective implementation of the discount.

This monitoring is carried out on a regular and continuous basis for the retail fuel market at service stations, i.e., exclusively at the last link in the supply chain consisting of the sale of the product, petrol, or diesel, i.e., to the end consumer at the service station. On a monthly basis, a report is published analysing the evolution of prices, gross margins, and the relationship with the evolution of international prices, among other aspects.

The CNMC analyses the evolution of service stations considering their characteristics: whether they are flagged or independent or the contractual link of each service station with the operator. There are some 12,000 service stations in Spain and in 60% of the cases it is the owner of the service station who sets the price, while in the remaining 40% it is the wholesale operators who set the prices.

CNMC Comments (IS/DE/010/22 – 07 July 2022):

  • The rebate came into force at a time (April 2022) after the large increases in the markets in March, especially for diesel, and its implementation coincided, during the first three months (April-June), with a sustained upward trend in international prices.
  • Unlike other countries, Spain reports retail prices to the Oil Bulletin Petrolier without applying discounts or rebates, so comparisons at European level may not be consistent. To make simple comparisons, based only on price trends, is to disregard the increase in the cost of the product suffered by the oil companies. On average, gross margins for the first five months of the year do not differ significantly from historical margins, which indicates that the bonus is being passed on to the consumer in general terms.
  • Based on the information available, the CNMC has concluded that, in general, the fuel distribution market through service stations appears to be passing on the bonus to the consumer. However, it does not rule out that some individual service stations have absorbed part of the €20 c/litre bonus and have increased margins.
  • In this sense, the CNMC continues to monitor this market, attentive to the alerts and complaints received and in continuous collaboration with the entities responsible for ensuring the proper application of this measure and the effectiveness of the rebate for consumers.

CNMC Press release (Spanish only):

Ángel Valdés Burgui

Lupicinio International Law Firm