Spain will extend tax relief on motor fuels until the end of the year and reintroduce safeguards against sharp rises in electricity and gas bills.
The €0.20/litre fuel tax cut for road diesel introduced in September will continue in October, while the cut for gasoline will rise to €0.20/l from €0.05/l. Unless a price-rise safeguard is triggered, the cut for both fuels will ease to €0.13/l in November and €0.06/l in December.
The safeguard restores the tax cut for either fuel to €0.20/l if Spain's consumer price index shows that its retail price has risen by more than 15pc on the year. It was triggered for diesel in September on the basis of July inflation data.
The measures are part of the Spanish government's third decree-law responding to fuel price increases caused by the conflict in the Middle East. They extend relief introduced for the second and third quarters that had been due to expire at the end of September.
Professional drivers will receive the general fuel tax cut plus an additional sector-specific discount, keeping their combined relief at €0.25/l throughout the fourth quarter. The additional discount will be €0.05/l in October, €0.12/l in November and €0.19/l in December, rising as the general tax cut is scaled back. It will be adjusted if the safeguard restores the general cut to €0.20/l.
Fuel price relief for the agricultural and fishing sectors will also be maintained, including the €0.20/l cut on the lower-taxed coloured diesel they use.
The government has also reintroduced a safeguard under which a 15pc rise in electricity or gas prices would trigger a reduction in VAT on bills to 10pc from 21pc and a cut in Spain's special electricity tax to 0.5pc from 5.1pc. The reductions previously applied from March to June.
Spain will limit the rise in its regulated natural gas tariff to about 15pc in October. The government said the tariff would have risen by more than 45pc without its intervention.
It will also raise the maximum regulated price for a standard 12.5kg butane cylinder to €19.55 from €18.84 and freeze it at that level until 30 June 2027.
The measures take effect on 1 October, putting Spain ahead of Portugal, where parliamentary debate on the government's proposed fuel price relief is scheduled to begin on 7 October.
Portuguese energy and environment minister Maria da Graca Carvalho said on Monday that Portugal could not afford fuel tax cuts beyond those already proposed by its government. She called for greater EU co-ordination, arguing that differences between national support measures could distort competition within the single market.
