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MADRID – Spain will temporarily abolish sales tax on olive oil to help consumers cope with skyrocketing prices, the government said last week.

Spain is the world’s largest producer and exporter of olive oil, but the price for domestic consumers has risen dramatically due to global inflationary pressures and a prolonged drought that has decimated stocks. Prices have also soared in other Mediterranean countries.

According to the Spanish Ministry of Agriculture, the price of olive oil has increased by 272% since September 2020. A 1.3-gallon bottle of olive oil can cost over $53 in a Spanish supermarket.

Spaniards use olive oil for cooking and to garnish sandwiches, salads, vegetables and other dishes. Last year, Spanish households consumed an average of 5.6 liters per person, according to the Ministry of Agriculture. But the rise in prices has led some to switch to cheaper cooking oils.

The government had already reduced the sales tax on olive oil from 10% to 5% as part of a package of measures to combat inflation.

There is no VAT on olive oil from July to September, after which the tax rate is two percent until the end of the year. After that, the tax rate is four percent and olive oil is considered a staple food.

Spanish Finance Minister María Jesus Montero said the decision reflected “the importance of olive oil in the Mediterranean diet and a healthy lifestyle”.

photo Bottles of virgin olive oil sealed with an anti-theft system are photographed on a shelf in a store in Barcelona, ​​Spain, Tuesday, June 25, 2024. Spain will temporarily eliminate sales tax on olive oil to help consumers cope with skyrocketing prices, the government said Tuesday. (AP Photo/Emilio Morenatti)
photo FILE – Day laborers work during the olive harvest in the southern town of Quesada, a rural municipality in the heart of Spain’s olive-growing region, on Oct. 28, 2022. Spain will temporarily eliminate sales tax on olive oil to help consumers cope with skyrocketing prices, the government said Tuesday, June 25, 2024. (AP Photo/Bernat Armangue, File)
photo Bottles of virgin olive oil sealed with an anti-theft system are photographed on a shelf in a store in Barcelona, ​​Spain, Tuesday, June 25, 2024. Spain will temporarily eliminate sales tax on olive oil to help consumers cope with skyrocketing prices, the government said Tuesday. (AP Photo/Emilio Morenatti)

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