Rising fuel prices spark five tenths increase in August CPI, to 2.7%

Petrol prices are still rising
Petrol prices are at record highs

According to the advance indicators of the evolution of prices in Spain, published yesterday by the National Statistics Institute, the Consumer Price Index (CPI) climbed five tenths in August, bringing its annual rate to 2.7%, mainly due to the rising price of fuels and lubricants.

Thus, the annual CPI marked two months of increases after rising three tenths in July to 2.2%, due to the increasing costs of medicines.

The highest rate of the year

The 2.7% rate reached in August is the highest the CPI has recorded during this year, and the highest since November of last year, when inflation stood at 2.9% year-on-year.

An increase in the annual CPI of this level (five tenths) has not been registered since late 2010, when inflation rose seven tenths in December, from 2.3% registered in November, to 3% in the last month of that year.

Meanwhile, the Harmonised Consumer Price Index (HCPI) for August stood at 2.7%, five tenths above the July rate.

The statistics agency reiterated that the advance indicators are only a guide, and will not necessarily coincide with the final data, to be published on 12th September.

The National Statistics Institute attributed this remarkable rise in prices in the eighth month of the year primarily to the rising prices of fuel and lubricants.

The prices for a litre of petrol and diesel have set new record highs this week, after increasing by 0.06% and 0.14%, respectively, just as people are returning from their August holidays and are also facing the increases in VAT, which will take effect from 1st September.

Specifically, the price per litre of petrol, which last week broke the 1.5 euro barrier, stood at 1.512 euros, while the price of diesel stood at 1.422 euros per litre, according to the Oil Bulletin data.

These prices reflect an average, but in some Madrid service stations a litre of petrol is selling at 1.538 euros, and that of diesel, used by about 80% of Spanish vehicles, is already exceeding 1.44 euros, according to data from the Ministry of Industry consulted by Europa Press.

Thus, petrol and diesel are maintaining the upward trend that began in July and mark a second consecutive week of records. Since the beginning of July, the price of a litre of petrol has gone up by over 12%, while diesel is 8.56% more expensive.

Filling the fuel tank of an average vehicle with a 55 litre tank now costs 83.1 euros, which is 10 euros more than a year ago. In the case of diesel, filling a tank costs 78.2 euros, also almost 10 euros more expensive than at the end of August 2011.

These price rises will be even greater with the increase in VAT from 18% to 21%, starting on Saturday, which will mean an increase of about 3.6 cents on the price per litre of petrol and about 3.5 cents for diesel, which could bring the prices of both fuels to around 1.8 euros per litre.

This rise in the price of motor fuels has coincided with the rise in oil prices in international markets in recent weeks.

However, the price of a barrel of Brent crude, the European benchmark, is currently trading at $112.3, more than three dollars less than last week, while a barrel of Texas is selling at $95.21, which is two dollars cheaper.

Nevertheless, fuel prices in Spain remain below the EU average. In fact, the price of petrol reached 1.701 euros per litre in the EU-27 and 1.727 euros in the Eurozone. In the case of diesel, the price stood at 1.548 euros per litre in the EU-27 and 1.529 euros in the Eurozone.

Article source: Kyero.com

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