The balance of the year 2022 in relation to the evolution of petroleum products in Spain that was published yesterday by the Spanish Association of Operators of Petroleum Products (AOP) leaves some surprising data, taking into account the context in which it was developed the year.
One of these data is that the evolution of fuel consumption reached 57.7 million tonnes. In other words, it rose by 8.1%, although it is still 3.5% below what was consumed in 2019, the last normal year before the pandemic. Last year’s increase contrasts with the potential contraction in fuel consumption that could be expected from the historically high prices that came to mark all raw materials after the outbreak of the war in Ukraine, and the sanctions on Russia that triggered the supply problems.
The tension was of such magnitude that the Spanish Government, like others in Europe, launched an aid policy to subsidize access to fuel, with discounts of 20 cents per liter from April and which were maintained throughout the year, while the major oil companies brought these discounts among their customers up to 30 cents in some cases.
Despite this circumstance, consumption increased in all product groups. The most striking occurred in kerosene, which rose by 75.7%. In this case, the increase has a logical justification. 2022 was the year in which aviation recovered more or less normal activity after the stoppages of 2020 and the slow recovery of 2021. The maximum consumption was recorded in the summer months coinciding with holiday season and the return from international travel. “Despite this strong percentage increase, it has not yet recovered to pre-pandemic levels”, the report states.
Only the desire to travel could explain the evolution of fuel consumption. Overall, the consumption of automotive fuels (gasolines and diesels) increased by 3.1% and is still 3.2% lower than in 2019. In this proportion, gasolines increase their demand by 9.7% against 1.5% of automotive diesels. The latter continue to account for 55% of all petroleum products consumed in Spain.
The AOP report states that the price of the two products was “directly affected by the international quotations of crude oil in the first half of the year and of already refined products in the second”. It should be remembered that both petrol and diesel reached historic high prices in June after reaching 2.13 euros per liter of petrol and 2.09 per liter of diesel. And for quite a few days throughout the year there was the strange market situation, at least until then, in which the price of diesel was higher than that of petrol.
Historic prices that did not prevent gasoline from reaching the highest demand since 2009. The escalation of prices also did not put a stop to products more linked to work activities such as fuel oil, which grew by 22.3 %.
The other somewhat surprising fact in the AOP report is the increase in the number of low cos t gas stations although, in the spring, these gas stations repeatedly complained about the risk that their permanence in the business.
Specifically, the year 2022 was closed in Spain with more than 12,000 gas stations in operation; 12,084, to be exact. With high prices and more demand, the evolution seems logical. April and May, however, were turbulent times for the sector. It was from the outbreak of the war or, rather, since the big oil companies, first, and then the Spanish Government, applied discounts to fuel prices. The mandatory discount was 20 cents per litre.
The methodology chosen to apply them was for service stations to advance the amount that would later be repaid via tax settlement. That April and early May of 2022, the organizations of independent service stations and many of the low cost brands put the cry to heaven. They warned that the measure would involve the bankruptcy of many stations in the face of the financial impossibility of advancing public discounts and of fighting against the additional price reduction imposed by the big ones.
The tension even came to be formalized in the form of a complaint before the National Commission for Markets and Competition (CNMC), which had to verify whether those discounts slowed down competition. The regulator concluded that no. The data known yesterday seem to confirm this. During 2022, they opened 263 new service stations of this model, while of the big brands, associated with the AOP, they closed six stations. In the last decade, the number of service stations associated with major brands has fallen by 6%, down to 6,143 points of sale.
Meanwhile, service stations of brands not associated with the AOP, which usually respond to the low cost business model, have passed the 5,000 barrier. This places this gas station model with a growth of 70% in the last decade and brings it close in number to the points of sale of the big brands, which in the same period of time have fallen by 6%.
