Die spanische Regierung wird die Mehrwertsteuer auf Benzin, Diesel, Strom und Gas auf 10 % senken.

TRANSLATION

The Government will approve this Friday, in an extraordinary Council of Ministers meeting held to assess the initial response to the effects of the war in the Middle East, a package of tax cuts affecting fuels, electricity, and gas. Among the most notable measures is the reduction of VAT on fuels, which will drop from 21% to 10%, as reported Friday morning by Cadena SER. This measure will be accompanied by others, such as a reduction in the special tax on hydrocarbons and a cut in VAT on electricity and gas, according to sources familiar with the measures the Government will put forward. With this, the Executive aims to lower the price of petrol and diesel at a time of strong tension in energy markets.

Energy products subject to the hydrocarbons tax have a wide variety of chemical compositions and are found in both liquid and gaseous states. In general, these are products used as fuel for heating or as motor fuel, excluding coal and other solid hydrocarbons. These include petrol, kerosene, diesel, fuel oil, liquefied petroleum gases, natural gas, biofuels, and biocombustibles.

The package also includes, according to the same sources, fiscal measures affecting energy. VAT on electricity and gas will also be reduced from 21% to 10%, along with a cut in the special electricity tax. In addition, the Government will suspend the tax on the value of electricity production, a measure aimed at reducing system costs and preventing them from being passed on to consumers in their final bills.

The electricity tax is a levy applied to electricity consumption at a rate of 5%. It applies both to electricity supplied for consumption and to electricity consumed by producers themselves. It is an indirect tax included in the price and paid by the final consumer through their electricity bill, although it is collected and paid to the Treasury by electricity companies.

Meanwhile, the tax on the value of electricity production is a direct, environmentally oriented tax that applies to electricity generation and its integration into the electricity system. It is paid by energy producers (not consumers) and is calculated on the total revenue obtained from generating electricity, applying a tax rate of 7%.

With this set of decisions, the Executive aims to contain the impact of the energy crisis resulting from the international conflict and to curb a potential rise in inflation, protecting both households and businesses in a context of growing uncertainty. The illegal attack by the United States and Israel on Iran has led, in just three weeks, to petrol reaching an average price of €1.709 per litre at Spanish pumps, while diesel is already priced at €1.837, according to the EU Oil Bulletin published this Thursday, based on average prices from Monday.

In addition to the fiscal package, the Government will present “structural” changes affecting the energy sector. According to sources involved in the negotiations within the Executive, measures related to intervention in the rental market—demanded by Sumar and other left-wing coalition partners—appear to have been ruled out.

The Prime Minister, Pedro Sánchez, will speak after the meeting to present a package that appears to be less ambitious than the one introduced in the early stages of the war in Ukraine. There are two reasons explaining why, at least for now, the response is more restrained than in 2022. On the one hand, the macroeconomic impact of the conflict is smaller than it was then, and within the PSOE—responsible for economic policy—there is a preference for proportionate, targeted measures that do not exceed Spain’s fiscal margin. On the other hand, according to government sources, the coalition’s parliamentary weakness and recent setbacks in Parliament force the Executive to present a minimal plan that can secure the maximum level of support in Parliament.

What a great way to increase demand on oil and thus increase its price further.

For context, they did the same for the first months of the war on Ukraine and what happened was that petrol and energy companies absorbed the lowered taxes as more revenue while maintaining higher prices.

So yeah idk.

The world really will do everything it can to not move to green energy