Andorra Lawmakers Clash on Fuel Price Hikes from Iran Conflict

Parliamentary Clash Over Fuel Price Surge Amid Iran Conflict

Opposition lawmakers in the Consell General have criticised the government for inaction in response to rising fuel prices triggered by the war in Iran and the closure of the Strait of Hormuz, while Finance Minister Ramon Lladós insisted the impact remains manageable and targeted measures could suffice if needed.

Social Democrat deputy Pere Baró accused the executive of failing to act despite visible effects on residents, noting that "wars are felt strongly" and the Hormuz closure has driven up costs across services. He highlighted market volatility and higher financing expenses that ultimately burden citizens, questioning whether the government planned to "do nothing" and calling for structural responses to a foreseeable issue.

Lladós countered that the government does not wait for external shocks to address purchasing power, emphasising Andorra's agility due to its size. He pointed to fuel prices below Ukraine crisis levels, a 17% rise in median salaries, free public transport—unlike in neighbouring countries—and price controls by FEDA and the government on energy. With the IGI at 4.5%, far lower than the 21% VAT elsewhere, he dismissed broad tax cuts as unfeasible, stating fiscal room is already limited and "we do not copy" neighbours. Instead, the minister outlined studying sector-specific aid for groups like transporters and builders, avoiding generalised relief since impacts vary.

From the Concòrdia group, Pol Bartolomé warned of limited capacity against inflation and urged redirecting resources, including from FEDA, while group president Cerni Escalé queried the adequacy of current steps amid rising living costs. Susanna Vela noted fuel sector requests for support, and Andorra Endavant's Noemí Amador suggested temporarily scrapping fuel taxes—a proposal Lladós rejected as benefiting high spenders disproportionately without major price relief.

Fuel statistics from the Statistics Department confirm the March uptick: heating gasoil rose over 22% from February (both home and retail), mobility fuels exceeded 21%—with gasoil at 1.49 euros per litre (up 21.7%) and improved gasoil at 1.52 euros (up 21.1%)—while petrol increased around 12%. Year-on-year, gasoils climbed 17-22% and petrol about 6%, though first-quarter 2026 mobility fuels held steady against 2025 and 12-month trends showed declines.

Lladós downplayed alarmist tones, asserting the situation "is not as catastrophic as portrayed" and impacts are not uniform. The government continues monitoring, having reviewed importer analyses, with no decisions yet as prices lag Ukraine peaks. He announced revisiting options in this week's cabinet meeting and seeking growth projection updates at next week's IMF spring session, noting no revisions for Andorra despite Spain's forecast drop from 2.8% to 2.1%.

Fuel importers, via Assidca president David Porqueres, urged focusing on fiscal adjustments—claiming 35% of petrol and 23% of gasoil costs are taxes— to restore the price edge over Spanish low-cost stations, now down to cents. Lladós acknowledged a potential green tax waiver but stressed its small scale.

Head of Government Xavier Espot added that public transport capacity would expand if fuel-driven demand grows, citing recent reinforcements, while rejecting across-the-board aid as "coffee for everyone."