SPAIN could save up to €17 billion in 2016 if crude oil remains at US$30 a barrel as it is currently priced, increasing the country's GNP by 0.5%.
For every 10% decrease in petroleum prices, Spain's Gross National Product rises by 0.2%, given that it imports 99.6% of its crude oil.
The GNP for Spain is expected to reach 3% this year independently of current crude oil prices, since it was calculated in the summer using an average barrel price of US$68.80.
With every tonne of crude oil filling 7.33 barrels, Spain has imported approximately 473.8 million barrels in the last 12 months – based upon the fairly constant exchange rate of US$1.08 to €1, this means Spain will have to pay just under €30bn for its 2015 petroleum consumption this year.
Even if crude oil did stay at summer 2015 prices of US$68.80 rather than US$30, it would still be 50% cheaper than in 2014 when barrel prices shot up to US$99.40.
But if the current US$30 continues over the rest of 2016, costs to Spain would fall from the €30bn it has to pay for last year's consumption to just under €13.1bn – less than half the 2016 bill - due for payment in 2017.
Some forecasts show possible oil prices as falling even further – US banks Morgan Stanley and Goldman Sachs predict barrel costs will drop to US$20 or thereabouts in 2016, whilst British bank Standard Chartered's forecast is even more adventurous, claiming oil will plummet to US$10 a barrel.
In the latter case, the saving to Spain would be over €25.6bn.
But the savings are only likely if Spain does not increase its petroleum imports – as sources from the oil industry reveal, most petroleum companies worldwide are tending to buy more fuel, stocking up now that prices are low, predicting a future increase, and partly because storage costs are more economical for higher quantities of oil.
In fact, oil imports went up by 10.4% in 2015, reaching record highs, with Spain having bought more last year than ever before in history.
Prices dropping are partly due to the fact that in 2008, the global industry made huge investments in improving refinery processes, meaning it has been able to produce far more in less time and of a better quality.
For the average person on the street, falls in crude oil prices have an impact in every area of their daily lives: not just cheaper petrol for their cars, but potentially lower prices in supermarkets, public transport, and the cost of non-perishable goods such as vehicles and electrical appliances.
This is because shipping and delivery internally and from overseas costs less, as does exporting which means a potentially higher profit margin.
The reverse was seen in 2012, when crude oil reached record highs of US$126.22 a barrel, leading to a typical petrol price of between €1.50 and €1.60 a litre in Spain.
Spanish oil company Funcas' statistics department leader, María Jesús Fernández, said the effects of crude oil prices on the macro-economy are difficult to quantify, but that for each 10% reduction, Spain's GNP rises by 0.2% - not just because of its own savings in importing fuel, but because the general public can afford to spend more as prices fall.
Read more at thinkSPAIN.com