Spain has announced a €5 billion energy support package aimed at easing the economic impact of the ongoing Middle East conflict, as rising fuel prices continue to pressure households and businesses. Prime Minister Pedro Sánchez said the government had approved a set of 80 measures designed to mitigate the effects of the war, warning that the crisis could cost the country billions.
“The war will cost Spaniards €5 billion,” Sánchez said, adding that further support could be introduced if needed.
The package is expected to benefit around 20 million households and 3 million companies, with a focus on reducing energy costs and limiting inflationary pressure.
Key measures include a reduction in value-added tax (VAT) on fuel from 21% to 10%, alongside cuts in excise duties on hydrocarbons. The VAT on natural gas will also be lowered to 10%, while the retail prices of butane and propane will be capped.
The government said the tax reductions could lower fuel prices by approximately €0.30 per litre in some cases.
Electricity-related costs will also be targeted. VAT on electricity and gas will be reduced to 10%, while a 5% indirect tax included in consumer bills will also be lowered. In addition, the government plans to temporarily suspend the tax on electricity production to prevent costs from being passed on to consumers.
The package includes strengthened social protections, including expanded subsidies for vulnerable households and a ban on cutting off energy or water supplies to those most at risk.
However, housing-related measures such as rent caps or mortgage relief have not been included at this stage.
The plan still requires approval from the Spanish parliament, but the government says it is a key step in cushioning the economic impact of the energy crisis and stabilising prices.
