Spain cuts natural gas sales tax to help people with costs

Spain will temporarily slash sales tax on natural gas from 21% to 5% to help consumers face rising energy costs this winter as Russia has cut back gas exports to Europe amid the war in Ukraine.

Teresa Ribera, Spain’s minister charged with energy policy, said on Tuesday that the reduction in sales tax will last until 31 December but can be extended beyond that date if needed. It also will apply to the sale of firewood and biomass pellets.

She said rising energy prices that all of Europe is enduring are directly linked to the reduction in gas flow from Russia as it tries to pressure Europe into dropping its support for Ukraine. Natural gas is used to heat and cool homes, generate electricity and power factories.

“These are not future threats, we are right now experiencing the consequences of the reduction in gas sent by Russia to the European Union,” Ribera said.

This is the latest measure taken by Spain, which, like governments across Europe, is trying to cushion the blow of rising costs due to a shortage of supply.

In June, Brussels allowed Spain and neighbouring Portugal to skirt European Union rules and subsidise consumers’ gas bills and put a cap on natural gas prices.

Ribera said those measures had saved Spanish consumers some €10 billion in excessive energy costs.