Staff Reporter TRANSPORT organisations in the Balearics called on the regional government yesterday, to demand that central Administration in Madrid makes taxation adjustments to compensate the Islands for the higher fuel costs they are having to pay.

The Balearic Transport Federation (FEBT), under the directorship of Salvador Servera, wants the Islands' leaders to assert their rights immediately under the auspices of a particular economic adjustment system, known as the Special Balearic Régime.

Through taxation adaptation, the scheme acknowledges, and compensates for, the higher cost of living in the Archipelago by virtue of its Island status.
The move by FEBT comes as the transport sector recognises that such an adjustment is “practically the only solution” to address the rise in costs which have come about due to the increase in fuel prices over the last few months.

Servera, pointed out that Article 13 of the Special Balearic Régime, signals that the cost of electric energy and fuel on the Islands should be the same as those on the Peninsula in terms of tariff. He condemned, however, the fact that the Balearics have nearly always had higher fuel costs simply due to the fact of being cut off from the mainland. “The only solution is to develop the Special Balearic Régime” he said “and have the extra prices we have had to pay for energy and fuel reduced”.
Servera urged the Balearic government to call on Madrid to bear in mind the special economic circumstances of being on an island in terms of energy costs. He wanted a guarantee for the residents of the Archipelago that the cost of fuel and energy will fall more or less in line with prices applied across the rest of the country.

Servera asked for “immediate measures” to be taken because the rise in the cost of fuel is already having knock-on effects in transportation companies in the Balearics.

He reported that these effects include costs having increased by some 2 to 3 percent within the first five months of the year, largely due to the fact that fuel accounts for between 20 and 30 percent of operating costs of transport companies on the Islands. “If costs continue to go up at this rate, there will be no other road open to us but to do what airlines and taxi drivers have already done: reflect the price increase in the charge we pass on to customers”, warned Servera.

The director did not see the introduction of a special industrial diesel-oil for heavy transportation as a solution to the problem; nor did he view the inclusion of more operators (and with them more competition in distribution) to the islands as a feasible alternative.

In 2003, the average price (without tax) of “diesel oil A” in the Balearics was 0.315 euros per litre, the highest of all the 50 Spanish regions, agaist 0.312 as a national average.

In 2002, the Balearic price (0.31 euros) was the highest in Spain, measured against 0.305 as a national average.
With taxes, the average price on the Islands was the highest in 2002, (0.70 euros, measured against 0.685 euros as a Spanish average). In 2003 the Balearics were only beaten into second place by Madrid, although in the Balearics the price of diesel-oil “A” was higher than the Spanish average (0.706 euros as against 0.704). “From a tax point of view, the Special Balearic Régime allows the introduction of measures that can be applied to balance up the inequality in mainland and island tariffs. We are asking for this to be applied as the fastest solution to the problem” signalled Servera, who discounted the option of creation a special diesel-oil just for the transportation trade. He said that for Spain, within the framework of the European Union, this would mean the application of a tax increase to bring the cost to the customer in line with other European countries, such as Germany and the United Kingdom, which have a higher level of fuel taxation.