Fuel prices have this week chained their eighth consecutive rise. Therefore, on September 1 the landscape at gas stations will shift slightly: the Government will activate an extraordinary tax rebate of 20 euro cents per liter for diesel and 5 euro cents per liter for gasoline.
This is due to the rather bleak outlook for consumers during July: the price of diesel rose by 15.7% that month compared with July 2025, surpassing the 15% threshold that had been set to trigger the rebate.
Diesel tax cut rises; gasoline’s falls
If we take a look at fuel prices during July, we can see a continuing upward trend across all fuels, especially diesel A: on July 1 the price per liter averaged €1.554, but by July 31 it was approaching €1.8 (A+ at €1.9 on average).
From mid-August, prices have kept climbing and today diesel A costs on average €1.87 per liter while unleaded gasoline 95 averages €1.74.
Chart: Diesel-Gasoline
In this inflationary context the Government activated a containment plan included in the Anti-Crisis Response Plan: if the year-on-year inflation of diesel or gasoline exceeded 15% during July, then a 20 euro-cent per liter reduction on the Hydrocarbons Tax would be activated. Diesel exceeded the limit by a wide margin (15.7%), so it will introduce a 20 euro-cent per liter rebate for this fuel instead of the 5 euro-cents planned in the government plan announced in June. It is expected that this measure will last throughout September.
On the other hand, gasoline showed a year-on-year variation of 7.3%: therefore, its rebate in September will be as planned: 5 euro-cents compared to 10 in August. This exceptional measure arrives at a bad time for consumers: inflation has surged to 4.3% in August due precisely to the price of fuels and food: the highest level in three years.
The situation in the Middle East, with the United States fanning the flames, does not suggest that the situation in the crude market will improve: uncertainty is not good in an already volatile market, and that is ultimately what drivers end up paying for. According to the Economy Ministry, the response plan has cushioned more than 60% of the price rise caused by the external shock of the war in Iran.
The Brent futures market stands at $88 per barrel today after climbing to $90 due to the U.S. attack on an Iranian island in the Strait of Hormuz. Statements such as Donald Trump referring to Hormuz as American territory give us an idea of how long this war will last.
