PETROL prices in the Balearics are about to hit the record high set in March last year after the price of crude hit $52 a barrel last week.
Petrol pump prices are poised to breach the one euro per litre benchmark if the price of crude continues to rise and, according to Jesús Salas, president of the Balearic Association of Petrol Stations, consumers will be hard hit.
He warned that transport, service sector, farming and fishing costs will all be bumped up, with consumers having to make up the difference.
He also urged the Balearic government to think twice about its new policy to try and even out taxes.
Sales warned that the proposed increase in fuel taxes by the local government will not be welcome, especially while the price of crude remains so high. According to the official price lists released yesterday by the Spanish home office, only unleaded '98 and super fuel costs more than one euro per litre.
The '95 unleaded, one of the most popular fuels in the Balearics, is bobbing at around the 94 cent mark while diesel A is listed at 89 cents and the new diesel A at 93 cents.
Although the Balearic government does not intend to introduce its new fuel levy until next year, Salas fears that until the price of crude settles down - any such move could prove very dangerous for the local economy and consumers.
In March last year, fuel prices hit the one euro per litre mark for the first time since the single currency was introduced and for a region like the Balearics which is so dependent on transport, increases in fuel prices have wide ranging effects on the economy and consumer confidence.
Last month, crude prices rose by 15 percent.
Spain's main airlines last week repeated that they intend to hold out as long as possible in order to avoid putting air fares up - however, depending on the destinations, consumers in the Balearics are finding air travel slightly more expensive than this time last year.
The Balearic Confederation of Business Associations (CAEB) is also concerned about the implications the government's new fuel tax will have on the local economy. CAEB maintains that the Balearic levy will lead at a 2.4 cents increase in the price of a litre of fuel in the Balearics. Add that to yesterday's official price list and the levy will take nearly all fuels to over a euro per litre. This levy will benefit none of our businesses, CAEB president Josep Olivar has warned. All it will do is further hamper the region's competitiveness, he added.
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