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Spain to Cut Fuel Discounts
If you’ve been enjoying the discount every time you fill up your car in Spain, there’s a bit of bad news on the horizon. The Spanish Government has confirmed that fuel subsidies introduced to soften the economic impact of the conflict in the Middle East will soon begin to disappear.
The announcement comes as Spain has also raised its economic growth forecast for the year to an impressive 2.6%, suggesting the country’s economy is holding up better than many expected.
Fuel Discount Being Phased Out
At the moment ( as at June 2026 ), drivers receive a 20-cent per litre discount on petrol and diesel, but that won’t last much longer.
Instead, the reduction will gradually shrink over the next few months, starting by a 5% reduction from 1st July:
- July: 15 cents per litre
- August: 10 cents per litre
- September: 5 cents per litre
- October sees this phased out totally.
The Government says international fuel prices have started to settle down, so the emergency support is no longer needed at its current level.
That said, there’s still a safety net in place. If fuel inflation jumps by more than 15% year-on-year, the full 20-cent discount can automatically be brought back.
Keeping an Eye on Fuel Prices
Many drivers have questioned whether petrol stations actually pass these discounts on in full.
To improve transparency, Spain’s National Commission for Markets and Competition (CNMC) has been given greater powers to investigate wholesalers and fuel retailers. The aim is to make sure any government support genuinely benefits motorists rather than disappearing into company profits.
So if you’re renting a car, knowing cheaper places for fuel can save a lot of money.
More Help for Farmers
The Government has also announced another €165 million in support for farmers to help cover the soaring cost of fertilisers.
This comes on top of the €500 million already made available earlier this year, offering further relief to Spain’s agricultural sector.
Electricity Tax Set to Fall
One of the biggest long-term announcements affects electricity.
Spain plans to gradually reduce the Tax on the Value of Electricity Production, with the rate falling from the current 7% to 5% by the end of 2026, dropping again to 3.5% in 2027, before being abolished completely in 2028.
Government ministers believe the move will encourage greater use of electricity across homes and businesses while helping to reduce energy bills.
According to Ecological Transition Minister Sara Aagesen, households, businesses and industry could see electricity bills fall by up to 6% once the changes take full effect.
Faster Renewable Energy Projects
The Government also wants to speed up renewable energy developments.
A new certification system will reward projects that meet high social, environmental and local community standards, allowing them to move through the approval process more quickly.
The hope is that renewable energy can be expanded without compromising environmental protections or local interests.
Billions Being Committed
This latest package of measures is worth around €1.825 billion.
On top of that, the Government expects to forego another €2.7 billion in tax revenue over the coming years as electricity production taxes are gradually reduced and eventually removed altogether.
What It Means for Expats
For most people living in Spain, the immediate takeaway is simple: fuel will gradually become more expensive again as government discounts are withdrawn. However, there could be some welcome savings on electricity bills over the next few years if the planned tax cuts deliver as expected.
I’ll update on the fuel subsidies via Facebook, where possible.
As always, if you’re driving regularly or keeping a close eye on household bills, it’s worth factoring these changes into your budget over the coming months.
