Andorra Fuel Importers Urge Tax Relief as Middle East Conflict Drives Up Pump Prices

Andorra's fuel importers are pressing the government for tax relief to offset surging pump prices triggered by the Middle East conflict involving Iran and Spain's recent reductions in VAT and special duties, which have narrowed the Principality's price advantage over stations in La Seu d'Urgell.

Associació d'Importadors i Distribuïdors de Carburants d'Andorra (Assidca) president David Porqueres reiterated the need for action following last week's meeting with Finance Minister Ramon Lladós. He argued that "the only option is a gesture from Andorra's side," emphasizing that any support would enhance citizens' purchasing power rather than aid the sector directly. Porqueres highlighted market pressures since the conflict began, with Brent crude hitting $110 per barrel—below the $130 peak during Russia's 2022 Ukraine invasion but at risk of matching it if tensions endure or intensify. Although Andorran prices rose more slowly initially than in neighboring areas, importers cannot fully offset raw material cost increases. With most goods arriving by road, higher fuel expenses are rippling through supply chains; some transport companies have warned clients of 10% fuel surcharge hikes, while prolonged sales declines could erode public tax income. The two sides agreed to schedule a follow-up meeting, though no date is set.

The government is reviewing Assidca's proposals amid signs of Brent crude stabilization but has made no commitments. At Wednesday's Council of Ministers press briefing, Spokesperson Minister Guillem Casal described the Assidca talks as having "gone very well" and noted an apparent flattening of oil prices in recent days. Officials are evaluating potential adjustments to the green tax, special fuel duty, or IGI—key elements of retail prices—while assessing budget effects and compatibility with ongoing purchasing power initiatives like free public transport, stable electricity rates since 2022, and minimum wage increases.

Casal stressed weekly monitoring of the situation, linking March's CPI rise to 4.1% primarily to the Iran conflict and fuel costs. "There is some viable scenario for the future," he said, but any measures must be affordable, achievable, and effective in curbing inflation without straining the administration unduly. Prices remain below 2022 highs, with a 12-15% differential intact, and the executive will act responsibly if conditions warrant. No final decisions have emerged, as further data analysis continues.