A Measure to Protect and Encourage the Consumption of Olive Oil
The Spanish government has announced that from July 1, olive oil will experience a reduction in VAT to 0% and will be included in the group of essential goods where the super-reduced rate applies. This decision, according to executive sources, aims to protect and encourage the consumption of oil, as well as reduce its price at a time marked by the drought affecting the Spanish countryside.
A Measure Agreed With Other Parties
This reduction in VAT on olive oil was agreed by the Junts party with the PSOE last January. In addition, other measures were agreed, such as the delegation of immigration powers to the Generalitat and the publication of fiscal balances. In exchange for this, the approval of the first decree-laws of the Spanish government was facilitated.
Context of the Increase in the Price of Olive Oil
In recent years, olive oil has experienced a significant increase in its price, going from 3-4 euros per liter to 8-10 euros. This increase is mainly due to the drop in production due to the drought and the increase in agricultural prices caused by factors such as the war in Ukraine, one of the world’s main producers of other fats such as sunflower oil. At the Catalan level, relevant producers such as the Protected Designation of Origin Siurana already warned last year that the price of oil could continue to rise due to the low production of olives.
