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Spain Approves €5 Billion Energy Tax Cuts to Contain Price Shock

The plan seeks to curb war-driven inflation through energy tax cuts alongside targeted relief.

Overview

  • The cabinet approved a package cutting VAT to 10% on fuels, electricity and gas, presented as a first step to cool prices.
  • Officials framed the measures as anti-inflation policy after recent energy spikes tied to the Middle East conflict.
  • The package includes protections for vulnerable households, guaranteeing minimum water and energy supply with a ban on disconnections.
  • Targeted support will be directed to exposed sectors including transport, agriculture, fisheries and energy‑intensive industry.
  • Local media earlier reported a temporary suspension of the hydrocarbons excise that could cut pump prices by €0.30–€0.40 per litre, a detail not confirmed in the official outline.