Fuel Subsidy Ends: Demand Surges, Quiet Market Reassessment Ahead

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The removal of the 20-cent fuel bonus on January 1 is expected to reduce consumption according to most analyses. Yet as the date nears, it is clear that fuel stations are already adjusting to privatization efforts seen this August. Before the discount ends, drivers are rushing to gas stations to top up their tanks, and industry observers forecast a noticeable surge in activity. In the last three days of the year, the province is projected to see refueling volumes reach about 1.2 million liters. Filling a typical 45-liter petrol tank on a Sunday costs around 71.55 euros, compared with 57.24 euros or about 14.31 euros more in recent days.

The central government announced last Tuesday that it will continue subsidies that primarily benefit professional sectors such as transport, agriculture, and fisheries. In other words, the general 20-cent per liter discount available since April 1 will expire this Saturday at midnight and will not be renewed for most drivers. Industry commentary from the gas station sector suggested this decision would immediately impact consumption, with an expected initial drop of around 10 percent as drivers cut trips or switch to public transport.

Yet that shift will begin on January 1, because the government announcement has triggered a rush at the pumps. There have been veritable avalanches of vehicles heading to registration points and long queues at peak times. Emilio Córcoles, Provincial President of the Mediterranean Gas Station Entrepreneurs Federation (Fedmes), notes that demand began rising last Thursday and is climbing steadily. He says, drivers want to fill tanks before the discount vanishes. This trend is reflected in business activity, which has intensified, and all signs point to Alicante gas stations doubling sales in the final three days of the year, with volumes reaching about 1.2 million liters combined for petrol and diesel.

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The increase is especially visible at the so‑called low-cost stations where prices are lower. Nationally, chains like Ballenoil and Petroprix report that demand is rising and that several outlets are nearing fuel stock limits, particularly in the Balearic and Canary Islands, though not in the Alicante region. Córcoles explains there is no supply problem in the province, noting that demand peaks are familiar during tourist inflows at summer and holiday periods.

Gas station leaders anticipate a roughly 10 percent drop in consumption after the discount expires, acknowledging that the market will adjust to the new price structure. Fedmes emphasizes that the challenge lies in maintaining sufficient diesel supplies for home heating, while avoiding stock shortages. The general observation remains that people do not suddenly run dry of fuel; rather, fill-ups have been delayed in the final days of the bonus period.

Meanwhile, fuel prices have slipped to their lowest levels since last February. Gasoline 95 is averaging about 1.590 euros per liter, while diesel sits near 1.662 euros, still above the pre-discount price levels from Sunday. Despite the relief, prices remain well below the peaks reached in June when gasoline and diesel hovered around 2.152 and 2.106 euros per liter respectively, highlighting the volatility of fuel markets and the impact of policy changes on consumer behavior.

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