Spain unveils €5bn package to cut energy costs
Mar 23rd 2026 · Spain
Madrid will cut VAT on fuel, electricity and gas from 21% to 10%, freeze butane and propane prices and provide targeted subsidies under a €5bn emergency package to shield households and producers.
- Spain announced a €5bn emergency package of 80 measures to lower energy costs.
- Standard 21% VAT on fuel, electricity and natural gas will be cut to 10%.
- The VAT cut should shave about €0.30 off a litre of petrol.
- Retail prices of butane and propane will be frozen and the tax on electricity production suspended temporarily.
- Direct fuel subsidies will be provided to farmers and fishermen.
- Italy and Austria plan national tax cuts and EU leaders have asked the European Commission to draft temporary emergency measures.
- Spain generates nearly 60% of its power from renewables, reducing its exposure to gas and oil price shocks.