Spain is the world’s leading producer and exporter of olive oil, but its cost for shoppers has risen dramatically because of inflation and a long-term drought that has decimated supplies.
ADVERTISEMENTSpain is to temporarily abolish the sales tax on olive oil to help consumers cope with soaring prices, the Spanish government has said.
Spain is the world’s leading producer and exporter of olive oil, but its cost for domestic consumers has risen dramatically because of continuing inflation and a prolonged drought that has decimated supplies. Prices have also risen sharply elsewhere in the Mediterranean.
The price of olive oil has shot up by 272% since September 2020, according to Spain’s agriculture ministry. A five-litre bottle of olive oil from a Spanish supermarket can cost more than €50.
The Spanish use olive oil to cook and to garnish sandwiches, salads, vegetables and other dishes. Households last year used an average of six litres per person, compared with 0.4 litres for international consumers, according to the agriculture ministry. But the rise in prices has made some switch to cheaper cooking oils.
The government had already cut the sales tax on olive oil from 10% to 5% as part of an anti-inflation package.
Sales tax will not not be applied to olive oil from July through September, when it will be taxed at 2% until the end of the year. From then on, it will be taxed at 4% and be considered a basic food stuff.
Spanish Treasury Minister María Jesús Montero said the decision reflects: “The importance of olive oil in the Mediterranean diet and a healthy lifestyle.”