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A driver checking fuel prices at a low-cost petrol station in Spain. Rodrigo Jiménez Economy Spain to reduce fuel and electricity taxes to alleviate Iran war impactThe Spanish cabinet is approving the first package of measures, among them a ban on cutting off supply to vulnerable households, on Friday
Madrid
Friday, 20 March 2026, 13:54
The Spanish cabinet is approving the first package of measures to alleviate the impact of the Iran war on Friday, three week after the start of the armed conflict.
Spain's households have already started to suffer the consequences of the rise in fuel prices, which soared to over 110 dollars a barrel.
The measures on Friday include fuel, electricity and gas tax reductions. In addition, the government will guarantee the minimum supply of water and energy, placing a ban on cutting off supply to the most vulnerable households.
One of the most significant measures, which will have a direct impact on all drivers, will be the reduction of IVA tax on fuels, from 21 to ten per cent. The aim is to curb the sharp rise in fuel prices since 28 February, when Israel and the US began bombing Iran.
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Electricity prices have risen in March due to the increase in gas prices, although renewables are acting as a containment shield for prices in Spain. Thanks to this, the price of electricity in Spain is almost 50 per cent cheaper than in neighbouring countries.
After weeks of analysis and debates, the government has finally opted to take certain measures that impact all consumers across the board, with tax cuts to lower energy bills, in order to curb inflation, which is expected to rise to 3.5 per cent in March and to reach four per cent in April.
The first package of measures will also include specific aid for the most vulnerable sectors, such as transport, agriculture, fisheries and energy-intensive industry.