The Plenary of the Congress will face this Thursday, July 23, in an extraordinary session, the debate and the vote on the new decree law that incorporates a package of tax reliefs to cushion the impact of the conflict in the Middle East, including the extension of certain fuel aid for households and the gradual elimination of the tax on electricity production.
The Executive had already given the green light to a first block of measures to contain the effects of the war that started in Iran, focused mainly on the hydrocarbons sector, but that decree law included temporary limits and several provisions ceased to apply at the end of June.
The persistence of the crisis and the tensions in energy prices led the Government to approve a second package of tax cuts. As is the case with any decree law, the measures take effect from their approval in the Council of Ministers on June 29, but now the Lower House must decide whether to validate it or reject it.
Reduction of the special hydrocarbon tax
Among the new features of the new package is a reduction of the special tax on hydrocarbons, which translates into a discount of 15 cents per liter in July, 10 cents in August, and 5 cents in September. Despite this relief, the reduction of VAT to 10% on fuels included in the first anti-crisis plan disappears, in line with the recommendations from Brussels.
The Government has also incorporated an automatic clause that would allow recovering the 20 cents per liter of support if the conflict intensifies and fuel inflation skyrockets again.
Similarly, the Executive commits to reviewing monthly the evolution of prices in relation to the CPI of the previous year and, if variations above 15% are detected, the reductions for both electricity and gas will be reactivated. This reactivation clause will cover diesel, gasoline, gas, and electricity.
The discount equivalent to 20 cents per liter on fuels for professionals in the primary sector and transportation is maintained. In the case of agriculture, an additional 165 million euros for the purchase of fertilizers is added to the already planned 500 million euros.
Margin control and elimination of the electricity tax
The regulation also provides that the CNMC implement a monitoring system for the gross margins of all gas stations to verify that they comply with the measures set out in the decree law. So far, the Government has only detected anomalous behavior in 52 service stations.
In terms of energy taxation, the text develops the structural and gradual elimination of the tax on electricity production, a recurring demand from PP and Junts during the legislature.
The disappearance of the tax will be done through a staggered reduction of the rates. The tax had a rate of 7% this year 2026. In the remaining two quarters, the tax will be around 5%, in 2027 it will drop to around 3.5%, and in 2028 it will be eliminated. According to the Government's calculations, this measure will allow the industry to increase its production by 2.6 billion euros annually and generate about 3,700 jobs.
Conditions for aid and European funds
The decree also extends the conditions for companies receiving public support, maintaining the obligation to have a Sustainable Mobility Plan for the workforce and the prohibition of layoffs for reasons related to the conflict for companies benefiting from aid related to the war.
Furthermore, the royal decree-law introduces greater flexibility in the use of resources from the Recovery, Transformation, and Resilience Plan. Sources from the Economy explain that it will be allowed to execute investments beyond the deadline of the end of August for those milestones already met but whose investments have not yet been completed.
The first Royal Decree-law, approved on March 20, had already guaranteed for all of 2026 the so-called social shield of the Government, with extraordinary discounts on the social electricity bond ("42.5% for vulnerable and 57.5% for severely vulnerable"), the increase of the minimum aid of the thermal social bond to "50 euros," and the prohibition of cutting off basic supplies (water and energy) to vulnerable households.
Overall, these new measures, with a duration of three months, will represent an additional fiscal effort of 1.825 billion in budgetary terms for 2026, to which another 2.7 billion will be added due to the drop in revenue in 2027 and 2028 from the gradual elimination of the tax on electricity production.
Boost to renewables and biogas
In the chapter on structural measures, to continue accelerating the implementation of renewable generation and biogas production with the maximum socioeconomic return for the areas where the facilities are located and with the least environmental impact, the National Standardization Organization (UNE) is empowered to develop through technical standards the seal of social, territorial, and environmental excellence, which will allow for priority processing of the highest-rated projects.