The Government expands the social shield against the Iran war: gas price increase limited to 15%, butane at 19.55 euros and fuel discounts

The Council of Ministers approved this Tuesday the third anti-crisis decree to contain the economic impact of the Iran war. The package arrives just hours before several of the aid measures deployed in recent months were set to expire and maintains for the last quarter of the year a good part of the protection destined for households, self-employed workers, and sectors especially exposed to rising energy costs.

The decision coincides with a new surge in inflation. The advanced CPI for September stood at 4.9%, six tenths above August's figure and its highest level since February 2023. The rise in fuel and other energy products explains a good part of the increase, while core inflation remains at 3.1%. The Minister of Economy, Carlos Cuerpo, has defended that the measures adopted since March have allowed to cushion approximately half of the increase in gasoline and diesel prices.

The main immediate effect will be on the gas bill. The Government will limit the weight of its international quotation to 35% in the calculation of the Last Resort Tariff, known as TUR, which covers more than three million consumers. With this change, the regulated tariff will rise by around 15% in October, compared to an increase of more than 45% that it would have registered without public intervention.

A maximum price of 19.55 euros for the butane cylinder is also set until June 30, 2027. Its current price is 18.84 euros, so it may become 71 cents more expensive, but it will be protected against stronger fluctuations in international markets.

Fuel price reductions and aid to the most exposed sectors

Gasoline and diesel will maintain a tax reduction of 20 cents per liter in October, 13 cents in November, and six cents in December. The decree also incorporates a clause that will allow recovering discounts of up to 20 cents if price trends become strained again in the coming months.

Professional transport will have a specific system. Vehicles entitled to the partial refund of the Hydrocarbon Tax will receive an additional five cents per liter in October, 12 in November, and 19 in December. There will also be direct aid for transporters who are outside this mechanism, including certain authorization holders, urban buses, and adapted taxis.

The support extends to maritime transport and freight rail, which will receive 15,000 euros for each diesel locomotive. In the agricultural sector, the 20-cent per liter bonus for agricultural diesel is maintained, while ship-owning companies will retain the compensations aimed at absorbing the increase in fuel and guaranteeing fishing activity.

The decree prepares another protective barrier for electricity and gas bills. If electricity inflation in September exceeds that of the same month of the previous year by 15%, the VAT on electricity will drop from 21% to 10% and the Special Tax on Electricity will go from 5.1% to 0.5%. The reduction would apply to contracts of up to ten kilowatts and to beneficiaries of the social bonus, in addition to being applied to natural gas, pellets, briquettes, and firewood.

These measures are added to the shield for vulnerable households that was already guaranteed until the end of 2026. The discounts on the electricity social bonus are maintained at 42.5% for vulnerable consumers and 57.5% for severely vulnerable ones, the minimum aid for the thermal bonus continues at 50 euros, and it will remain prohibited to cut off water, electricity, or gas to protected families.

The package also raises the minimum reserves of liquefied natural gas from 16.5 to 21 days, doubles the penalties for infringements in the hydrocarbon sector, and commissions the National Commission for Markets and Competition to conduct a study on the formation of energy prices and their transfer to consumers. The three decrees approved since March already mobilize more than 12,000 million euros.

The regulation will come into force after its publication in the Official State Gazette and will have to be ratified by Congress within a maximum period of 30 days. Companies receiving aid will maintain the prohibition of dismissing employees for reasons linked to the war and must have a Sustainable Mobility Plan for their workers.