Fuel price surges strain global supplies and Spanish fiscal targets

Global diesel and gasoline prices are rising due to supply chain disruptions and refinery constraints. Tensions in the Middle East, specifically involving the United States, Israel, and Iran, have impacted oil flows through the Strait of Hormuz, a critical chokepoint for global petroleum. This has led to significant price hikes in Europe, with diesel approaching 3 euros per liter in countries like Germany and Italy.

In Spain, Inés Olóndriz, president of the Independent Authority for Fiscal Responsibility (Airef), has warned that the government has limited fiscal space to maintain fuel subsidies without compromising financial objectives. Airef has revised Spain's deficit forecast upward to 2.7%, citing factors such as fuel tax rebates. Olóndriz noted that meeting the projected spending ceiling for the current year is ‘practically ruled out’ if spending dynamics continue, urging the government to adopt a medium- and long-term vision for the 2027 budgets.