Spain caps gas bills, extends fuel tax cuts to winter

Spain's government will extend tax cuts on petrol and diesel until the end of December and cap regulated gas tariffs through the winter, according to a draft decree approved on Tuesday. The fuel discount will shrink each month: 20 cents per litre in October, 13 cents in November and 6 cents in December. A safeguard clause allows the government to raise the discount again if oil prices stay high. The plan also limits the regulated gas tariff, known as the TUR, which covers more than 3 million households. The draft sets a cap so the tariff cannot rise more than 45% above the rate in force since 1 July. Deputy Prime Minister Sara Aagesen said the cap means "instead of rising 49%, it stays at 15%". The price of butane cylinders will also be frozen. The 12.5 kg bottle cannot exceed €19.55 on the Spanish mainland until 30 June 2027. Other measures in the decree include: - A temporary return of 10% VAT on electricity and certain fuels. - A cut to the Electricity Tax to the legal minimum of 0.5% if energy inflation tops 15%. - New rules requiring renewable plants to help control grid voltage, a key issue in the 2025 blackout. - Higher fines under the Hydrocarbons Law, doubling maximum penalties to €60 million for "very serious" offences, €30 million for "serious" and €1.2 million for "minor". - A new penalty system for sustainable aviation fuels. - Mandatory storage of liquefied natural gas (LNG) from November 2026 to March 2027. - More power for CORES, the strategic reserves body, to decide where oil reserves are released during shortages. - Tougher rules for Energy Saving Certificates (CAE) and access for ministries to the National Energy Efficiency Fund. - Two studies by the CNMC, the competition watchdog, on energy and food prices, looking at competition and whether aid reaches consumers.