Inflation Trends Highlighted by INE and Fuel Price Shifts
The National Institute of Statistics, known as INE, released the leading indicator for the Consumer Price Index this Wednesday. The final figure is not published until September 12, so this release marks a preliminary snapshot. Inflation rose for a second consecutive month, staying at 2.6 percent. This is three tenths higher than July’s 2.3 percent and seven tenths above June’s 1.9 percent, marking the lowest rate observed since April 2021.
According to INE, the main factor driving the latest uptick in inflation is fuel oil, with annual price ceilings for gasoline largely in effect and diesel prices rising when January values are excluded. The energy sector continues to exert a strong influence on overall price levels.
In Alicante, the average price for 95 octane gasoline stands at 1.714 euros per liter. To see a new record, one would need to look back to November of the previous year when it reached 1.755 euros. Diesel sits at 1.612 euros per liter, the highest since the start of the year when it was 1.687 euros. Last May, gasoline averaged 1.595 euros and diesel 1.412 euros, illustrating the ongoing upward drift in fuel costs.
Prices remain higher than August 2022, when gasoline averaged 1.812 euros and diesel 1.851 euros. It is important to note that a central government subsidy of 20 cents per liter was in effect at that time, and would need to be subtracted from those values when making year-over-year comparisons.
The Federation of Mediterranean Service Stations, Fedmes, views the current fuel price rise negatively. Drivers are cutting back on travel and sales, as they seek alternative transportation options to manage costs.
A fruit market scene in Guardamar del Segura is cited to illustrate the broader impact on daily life. Photo credit: AXEL ALVAREZ.
While fuel oil is the main driver of the inflation spike, other factors play a role. Electricity prices have also climbed, setting six-month highs in August, although the monthly rise did not reach last year’s peak. The year-over-year electricity price increase stands around 49.4 percent. Food inflation remains a concern, though the exact path for August is unclear. In markets in Alicante, fresh fruit and fish show notable price pressures. Paco Alemañ, president of the Association of Dealers in Alicante Municipal Markets, notes that stone fruits are growing more expensive due to drought and heat, with demand holding firm. Prices for peaches and nectarines rose to around 2.75 and 3.25 euros per kilo respectively, contributing to overall increases of 10 to 15 percent in some cases, with notable spikes against the 2020 season.
Lower-income households face greater inflation pressure, particularly those over 60. In the fish sector, reduced supply linked to EU fishing cuts and recovering tourism together push prices up. A stall owner at the Alicante Central Market reports red shrimp near 100 euros per kilo, with other fish such as San Pedro rooster or dentex around 40 euros per kilo, reflecting strong summer demand.
On inflation metrics, INE notes that core inflation — which excludes volatile energy and unprocessed food prices — eased by one tenth from July to 6.1 percent in August. Projections for the coming months suggest a gentle rise in inflation, averaging about 3.2 percent through year-end.
Olive oil costs have climbed to 9.40 euros per liter, and the Consumers and Users Organization reports a broad rise across brands. The organization highlights a roughly 15.4 percent increase over the past six weeks, driven by a smaller harvest. While some brands exceed 12 euros, average prices stand near 9.42 euros. The OCU calls for tighter oversight of the production chain to curb abuse and speculative behavior within the sector.