Spain has extended fuel relief with a second package of temporary measures designed to shield households and businesses from the economic impact of the Middle East crisis, while preparing to reduce discounts and continuing its push towards renewable energy.
Fuel discount to be phased out gradually
The biggest change for motorists is the gradual reduction of the current fuel tax relief.
Rather than ending immediately, the discount will be scaled back over the next three months:
- July: 15 cents per litre
- August: 10 cents per litre
- September: 5 cents per litre
However, the government has introduced a safeguard. If annual fuel inflation rises above 15%, the full 20-cent discount will automatically return.
Professional transport operators, farmers and the fishing industry will continue receiving the full 20-cent-per-litre discount until 30 September.
Electricity tax to disappear by 2028
The government has also confirmed plans to phase out the Tax on the Value of Electricity Production (IVPEE).
The rate will fall from 7% to:
- 5% in 2026
- 3.5% in 2027
- 0% in 2028
Ministers estimate the reduction will save taxpayers around €315 million this year alone.
Another safeguard has also been included. Should electricity or gas prices rise sharply again, Spain will be able to temporarily reintroduce emergency measures, including reducing VAT on electricity, natural gas, pellets and firewood from 21% back to 10%, while cutting the Special Electricity Tax from 5.1% to 0.5%.
More support for farmers and transport
The latest package also provides an additional €230 million for Spain’s agricultural and fishing sectors, taking total support since March to more than €1.1 billion.
Measures include continued fuel support for agricultural machinery and fishing vessels until the end of September, alongside increased direct aid for fertilisers.
Farmers will receive higher payments of €38.33 per hectare for dryland crops and €92.50 per hectare for irrigated land.
Road transport companies will also continue receiving assistance to offset the cost of professional diesel during the same period.
Greater oversight of fuel prices
The government is also giving Spain’s National Commission on Markets and Competition (CNMC) stronger powers to monitor fuel pricing.
Wholesale suppliers and fuel retailers may now be required to provide detailed pricing information, allowing regulators to identify unusual pricing practices more quickly.
Where abnormal behaviour is detected, individual operators could be named in the regulator’s weekly fuel market reports, alongside any enforcement action.
Social protections remain in place
The package also keeps existing protections for vulnerable households introduced earlier this year.
These include enhanced electricity social tariffs, increased heating assistance through the thermal social bonus and the continued ban on disconnecting essential water and energy supplies for vulnerable families.
Businesses benefiting from government aid must also continue complying with conditions requiring sustainable mobility plans for employees and restrictions on dismissals linked directly to the international crisis.
Renewables remain a long-term priority
Alongside the temporary support measures, the government continues to accelerate Spain’s transition towards cleaner energy.
New rules aim to speed up renewable energy projects, biogas production and electricity grid upgrades, while encouraging developments that demonstrate strong environmental and social benefits.
The package also supports greater use of battery storage, particularly in Spain’s island territories, helping reduce reliance on imported fossil fuels while strengthening the country’s long-term energy security.
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