Palma.— The increase in VAT and the price of fuel is causing the use of petrol and diesel in the Balearics to plummet, industry sources confirmed yesterday.

The Balearic Service Station Association said that its members are registering a downturn in business of between 5 and 9 percent. “Over the last few years,” said Association President Jesús Salas, “the accumulation of decline in business has amounted to 30 percent and a point has been reached where we can't operate with further significant falls in sales.” “What has also affected us,” he said “is that the stagnation in the construction industry. This has meant that lorries aren't filling up at service stations to the same extent. The loss has hit us hard because this has all been happening at the same time as the rise in the cost of a barrel of petrol.” Central Government has asked the fuel supply companies to keep their profits in check on the grounds that “at a time of economic crisis” all sectors of industry have to make some form of sacrifice.

However, petrol stations maintain that they can't sustain any further cut in costs “because we only gain 6 cents per litre of fuel in profit”. “We don't have any margin to play with because this is all we have to keep the service stations operating, to staff them and maintain them. “All these general costs are high,” said Salas.
He explained that 98 percent of petrol stations have absorbed the hike in VAT through the price of other products at the stations such as car washes. “We don't touch the petrol prices at all. The situation is really difficult for us.”