Inflation in Extremadura has reached its highest level in years, with prices up 4.2 percent over the past twelve months. Petrol and diesel prices have jumped by 22 and 27 percent, adding pressure to household budgets and pushing up costs across the region.
Transport is now the most expensive category, with prices up 11 percent from last year. The increase is closely tied to global oil supply problems: tensions near the Strait of Hormuz and disruptions to crude shipments are driving up local costs. The effects are clear at the pump, while higher energy prices are also feeding into housing and utility bills, as well as restaurant costs.
Information from the EU Oil Bulletin, Spain had the second-lowest diesel prices in the EU in early September, despite the sharp domestic increase.
Data from the Instituto Nacional de Estadística shows Extremadura’s inflation rate is now almost level with the national average of 4.3 percent. Prices in the region rose 1.2 points more than in July, marking two consecutive months of faster increases. Month to month, inflation rose 0.8 percent; since January, prices have climbed 3 percent.
Prices are also rising in other regions, but Extremadura stands out for the pace of the increase. Only Cantabria and Galicia report higher annual inflation, with Castilla y León also above Extremadura. The Canary Islands and La Rioja have the lowest rates. Transport costs are rising fastest in Extremadura, while housing costs and bills for water, electricity and gas have also climbed sharply over the past year.
Nationally, Spain’s inflation is at its highest since early 2023, mainly because of rising fuel prices. The European Commission reports that petrol now costs 1.815 euros per litre, up from 1.482 euros a year ago. Over the same period, diesel has risen from 1.410 to 1.795 euros per litre. In five years, diesel prices have increased by more than 41 percent, while petrol prices are up 27 percent.
Official INE data show that Spain’s general price index rose by 0.7% in August compared with July, while core inflation slowed to 2.9%. The fuel-driven surge has not fully carried through to underlying price trends, which remain more moderate.
Instituto Nacional de Estadística
Government officials cite the ongoing energy shock from the conflict in Iran as a major factor. The Ministry of Economy, Comercio y Empresa links the latest inflation jump to fuel price hikes, noting that lower prices last August make this year’s increase appear steeper. The ministry also says inflation in food and non-alcoholic drinks remains relatively contained at 2.3 percent, though that is the highest level since April. Eggs and beef saw the biggest increases, followed by fish.
To offset the impact, the government has extended its response plan: diesel now gets a 20-cent-per-litre tax cut, while petrol gets a 5-cent reduction. Fuel prices are rising faster than these measures can offset them, and the ministry says inflation in Spain remains stubbornly high, though slightly below the eurozone average.
Unions are dissatisfied with official statements. UGT Extremadura says wage growth in the region, just over 3 percent, lags well behind inflation and erodes workers’ purchasing power. The union is calling for immediate action: a new collective bargaining agreement, salary increases of at least 4 percent and stronger wage protection clauses. UGT also wants the minimum wage reviewed every six months if inflation forecasts are missed. It argues current relief is insufficient given volatile global energy markets.
With transport costs rising faster than any other category, UGT cites the end of earlier tax breaks as another reason expenses are increasing. The union argues that stronger wage policies and targeted support for low-income workers are needed to prevent further losses in purchasing power and growing inequality.
Spain’s inflation is now closely tied to global energy markets. International tensions are keeping oil prices high, and regions such as Extremadura continue to feel the strain. The government has limited options, while unions are pressing for higher wages as autumn approaches. If energy prices remain high, the cost-of-living crisis in Extremadura and elsewhere is likely to worsen, widening the gap between wages and prices.
