For millions of households in Spain, energy will soon become more expensive again. The Spanish government will end several tax relief measures on electricity and natural gas on 1 June, which had been introduced during the energy crisis. As a result, costs for consumers will rise noticeably once more after months of relief.
Spain Expat Press Editorial Team
by Marlon Gallego Bosbach
Electricity, gas and heating costs are particularly affected. The reduced value-added tax (VAT/IVA) on energy products will be increased again from 10 to 21 per cent. In addition, the special electricity tax will also rise significantly once more. During the crisis, this had been temporarily reduced to just 0.5 per cent and will now return to around five per cent.
Government responds to energy crisis
The measures were originally part of a multi-billion-euro anti-crisis package introduced by the government of Prime Minister Pedro Sánchez. The background was sharply rising energy prices due to international tensions and the impact of the war in the Middle East, particularly in connection with the Iran conflict. Spain subsequently introduced extensive tax relief measures to ease the burden on both households and businesses.
In addition to the reduction in VAT, other charges were also cut or temporarily suspended at the time. These included the electricity generation tax as well as discounts on fuel, diesel and energy-intensive industries. Overall, the support package amounted to around five billion euros, according to Spanish media reports.
Consumers must expect higher bills
According to the government, energy prices have now stabilised, which is why the crisis measures are being gradually rolled back. However, economic experts expect that many consumers will already notice the changes on their electricity bills from the summer months onwards. Households that make heavy use of air conditioning or rely on electric heating systems and gas heating are likely to be particularly affected. Especially during the hot summer months, higher energy prices could therefore have a noticeable impact on many families.
Some support measures will remain in place for now.
Despite the rollback of many tax relief measures, some support schemes are set to continue for the time being. These include, among others, benefits for the transport sector as well as the so-called Social Bonus (“Bono Social”) for low-income households.
The Social Bonus continues to offer significant discounts on electricity costs for particularly vulnerable families and pensioners with low incomes.
Debate in popular expat regions
In the Balearic Islands, on the Costa Blanca and in other popular expat regions, the announced return of higher energy taxes is already causing discussion. In these areas in particular, electricity costs – especially due to the heavy use of air conditioning during the summer months – are considered a key factor in the cost of living for many residents and expatriates.
Many consumers now fear that monthly utility costs could rise significantly once again.
