Households across Spain are facing higher electricity and gas bills from June, as the government withdraws a series of tax relief measures introduced during the energy crisis linked to the conflict in Iran.

Spain Press Editorial Team

From 1 June, VAT on electricity and gas has returned to the standard rate of 21 per cent, up from the reduced 10 per cent applied in recent months. At the same time, the electricity tax has been restored to 5 per cent, having previously been cut to just 0.5 per cent. Tax reductions on alternative fuels such as pellets and firewood have also been scrapped.

For consumers, the impact is expected to be immediate. Although energy prices have remained lower than a year ago, the removal of tax relief is set to reverse that trend in the short term. Without these measures, electricity prices would already have risen by around 4.8 per cent in April, with gas prices also edging higher.

Higher costs for households

The impact will become visible in the next billing cycle. Although energy prices have recently been lower than a year ago, the removal of tax relief changes the short-term outlook. Without these measures, electricity prices would already have risen by around 4.8 per cent in April, while gas prices would have seen a modest increase.

Higher costs for households

The impact will become visible in the next billing cycle. Although energy prices have recently been lower than a year ago, the removal of tax relief changes the short-term outlook. Without these measures, electricity prices would already have risen by around 4.8 per cent in April, while gas prices would have seen a modest increase.

Wholesale prices add pressure

Market developments are contributing to the upward trend. In May, the average electricity price on the Iberian wholesale market rose by nearly 30 per cent compared with April. While these prices are not passed on directly, they play a significant role in shaping consumer tariffs.

Fiscal cost behind the decision

The Spanish government has justified the move by citing the high cost of the measures. Estimates suggest that tax relief on electricity and gas alone has led to around €1 billion in lost public revenue.

Fuel support remains in place

Not all relief measures are ending. Tax reductions on fuel, as well as support for certain professional sectors and vulnerable households, will remain in force at least until the end of June.

The government is currently considering whether to extend some of the measures into the summer months. Trade unions and political partners are already calling for an extension if energy prices continue to rise.