Andorra Scrambles to Match Spain's 20-Cent Diesel Discount by September 1

Spain has increased its diesel discount to 20 cents per litre from 1 September, triggering urgent negotiations in Andorra to match the move and preserve price competitiveness.

The Andorran government and fuel importers met shortly after Madrid's announcement last Thursday to agree on a new diesel discount, targeting implementation by 1 September. David Porqueres, president of the Association of Fuel Importers and Distributors, expressed optimism about reaching a deal before the end of August. "There has been a lot of reactivity and good willingness. The idea is to work until the end of the month so that we are not affected by this measure and the discounts are in place on 1 September," he said.

The plan focuses solely on diesel, as unleaded petrol discounts have not yet expired and Spain has not altered its petrol relief. Porqueres indicated Andorra aims to apply comparable discounts to those in Spain—or whatever is needed—to maintain the current price differential. Stations in La Seu d'Urgell currently sell both diesel and 95-octane unleaded petrol 4 to 8 cents per litre cheaper in Andorra. Without action, Spanish diesel would undercut local prices from 1 September, as Andorra's current 5-cent diesel support ends, while petrol aligns at 5 cents.

"If Spain does not touch the petrol discounts, neither will we," Porqueres added, emphasising joint decisions as before. The government echoed this in a statement, pledging to monitor neighbour prices closely and adopt measures if needed to safeguard diesel competitiveness and purchasing power.

Importers will again cover part of the new discounts, mirroring the July arrangement. To ensure compliance with the relief active since 15 July, the government approved a control regulation yesterday via extraordinary council decree. Operators must submit sales data, prices and tax relief proof to the Department of Taxes and Borders, which can request further verification.

Spain's escalation follows its late-June anti-crisis decree, activated by diesel prices rising around 16% year-on-year due to worsening Middle East hostilities, including US-Iran tensions around the Strait of Hormuz. Andorra's prior relief—10 cents per litre on diesel in July and 5 cents in August—had restored differentials lost after Spain's late-March cuts, which slashed local sales and nearly 1.5 million euros in IGI, special taxes and green fees from April to July versus the previous year.

Diesel costs remain over 10 cents higher than early July despite ongoing discounts, while petrol is now slightly cheaper. Prolonged tensions may limit relief to competitiveness alone. No final discount figures have been set.