The BOE deploys the energy shield: VAT reduction, price monitoring and pressure on oil companies
The Government has published in the BOE the new energy package designed to mitigate the economic impact of the war in Iran, in a context of strong volatility in the international oil and gas markets. The decree includes direct tax reductions on fuels -with a VAT reduction from 21% to 10%- and additional measures on electricity and gas to contain the impact on households and businesses.
The core of the plan is not only fiscal. The Executive strengthens control over the entire energy distribution chain to prevent the reductions from being diluted in business margins. To do this, it enables the National Commission for Markets and Competition (CNMC) to request detailed information from wholesale operators, refineries, and service stations on prices, costs, and sales volumes.
Fines of up to six million and weekly cost control amid full tension over the war
The decree introduces a sanctioning regime that contemplates fines of up to six million euros for those companies that do not provide the required information or fail to comply with transparency obligations. The measure seeks to shield the effective transfer of tax reductions to the final consumer at a time of extreme tension in the energy markets due to the war.
In addition, a periodic reporting obligation is established: large companies in the sector must report weekly for at least three months the acquisition costs of raw material and sales prices to gas stations, both their own and independent. This data will be analyzed by the CNMC and transferred to several ministries to evaluate market behavior.
The Government will monitor margins in a market tensioned by the global energy shock
The stated objective of the Executive is to avoid episodes of speculation in a context in which the war in the Middle East has shot up energy prices and has strained the entire global supply chain. The decree foresees that the CNMC will prepare before May 31 a detailed report on the evolution of prices and the degree of effective competition in the sector.
The background is clear: the margins of the energy sector soared during the previous inflationary shock that began in 2021, and although they have moderated, they remain above pre-crisis levels. The Government tries to anticipate a new cycle of inflationary pressure derived from the war in Iran, which has already caused significant increases in oil and gas globally.
A 5 billion plan in the midst of an energy war with direct impact on consumers and businesses
The energy package is part of a broader plan valued at around 5 billion euros that includes nearly 80 measures. In addition to fuels, it incorporates tax reductions on electricity and gas, strengthening of social bonuses, and specific aid for particularly exposed sectors, such as transport, agriculture, and electro-intensive industry.
The decree enters into force immediately after its publication in the BOE, although it must be validated in Congress in the coming weeks. Its activation coincides with one of the most delicate moments for the European economy, marked by the escalation of the war in Iran, the pressure on the Strait of Hormuz and the structural increase in the cost of energy.