Soaring Diesel Prices Push Alicante Hauliers into the Red

Fuel now accounts for around 40% of operators’ costs, with filling a truck costing approximately €600 more than a year ago

Transport companies across Alicante province are warning that soaring diesel prices are threatening the survival of businesses already operating on wafer-thin margins.

Fetrama, the province’s leading road transport association, says the cost of refuelling a truck has risen by an average of €600, leaving some companies running at a loss. The organisation is urging the Spanish Government to extend existing fuel subsidies and restore support to 20 cents per litre.

More than 10,000 lorries are estimated to be based in Alicante province. After six months of conflict in Iran and continued disruption to international energy markets, operators say the escalating cost of diesel has pushed many businesses into a critical financial position.

Fetrama has already recorded the first departures among its members, with several operators considering whether they can continue trading.

“Some are asking themselves whether they should close their businesses or what else they can do,” said Fetrama general secretary Antonio Gabaldón.

Although only a small number have reached that point so far, Gabaldón warned that the situation could deteriorate rapidly depending on fuel prices and the future of government assistance.

Support cut to five cents

Fuel support for the transport industry has already been reduced from almost 20 cents per litre to five cents. The measure is due to expire next week unless the central government approves an extension.

Fetrama argues that the reduction comes at the worst possible time for a sector facing steep increases across almost every area of its operations.

“The average profit margin in the industry is only around 5%, and all our costs have risen sharply,” Gabaldón said. “Wages increased by 2.9% at the beginning of the year, insurance premiums have gone up considerably, and workshops and tyres have also become much more expensive.”

The latest rise in diesel prices, he added, has dealt another severe blow.

Diesel now costs an average of €1.925 per litre across Alicante province—around 37% more than a year ago. Prices have already passed €2 per litre at a growing number of filling stations.

Based on the capacity of a typical heavy goods vehicle, Fetrama calculates that each fill-up now costs approximately €600 more than it did before the recent surge.

“It is outrageous,” Gabaldón said. “We are now seeing companies operating at a loss.”

Operators unable to pass on costs

Spanish regulations provide for transport rates to be reviewed when fuel prices rise by more than 5%. However, many haulage companies find it difficult to pass the full increase on to their customers and are forced to absorb the additional cost themselves.

That increase is eating directly into profit margins that were already extremely limited.

Cash flow is another major concern. Transport companies must normally pay for fuel immediately, but may not receive payment from their customers for 30 or even 60 days.

The delay leaves operators financing rapidly rising fuel costs from their own resources while waiting weeks to be paid for completed work.

As a result, diesel now represents approximately 40% of the average transport company’s total expenditure. Just a year ago, it accounted for between 25% and 30%.

The increase has placed considerable strain on company finances and left smaller operators particularly vulnerable.

Industry seeks return to 20-cent subsidy

Fetrama hopes the Government will extend the partial refund of the Hydrocarbons Tax currently available to the industry. However, the association believes maintaining the present five-cent rate would be insufficient.

Through its national confederation, the Alicante organisation is calling for the subsidy to be restored to 20 cents per litre.

Representatives from the transport industry were due to meet officials from the ministries of Finance and Transport on Tuesday to discuss the crisis and the future of government support.

Fetrama has also raised concerns about delays in receiving existing subsidies. The association said problems arose when one of Spain’s major filling-station operators transferred the necessary information to the Tax Agency, holding up payments to eligible companies.

Fetrama represents approximately 620 Alicante transport businesses operating a combined fleet of around 5,500 trucks—more than half of all the heavy goods vehicles based in the province.

The association warns that without stronger assistance or a substantial fall in fuel prices, more companies could soon be forced to consider whether remaining on the road is financially sustainable.

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