Spain announces tax cuts on fuel, electricity in response to energy crisis

MADRID – Spanish Prime Minister Pedro Sánchez announced a sweeping package of  “proportional” measures to mitigate the fallout of the energy crisis triggered by the war in the Middle East, including “drastic reductions” on energy-related taxes.

Following an extraordinary cabinet meeting on Friday, Sánchez said the 80-measure package was designed to provide both structural and short-term relief, shielding key sectors and consumers from surging costs.

Speaking at a press conference, he said the package would “mobilise” €5 billion through tax breaks and subsidies, adding that Spain’s “robust economy” – supported by significant investment in renewable energy – provides a “strong buffer” against fluctuating gas prices.

“In Spain, the price last week was €14 per megawatt-hour; in Italy, France or Germany, it was over €100,” he said.

The measures include “drastic reductions” in energy taxation, lowering the VAT rate on electricity, natural gas,…