Sanchez's Anti-Crisis 'Shield': Gasoline and Diesel Prices to Drop by €0.25–€0.35 per Liter in Spain Starting March 21
Sanchez's Anti-Crisis 'Shield': Gasoline and Diesel Prices to Drop by €0.25–€0.35 per Liter in Spain Starting March 21
On March 20, 2026, Spain’s Council of Ministers approved an emergency anti-crisis plan to reduce fuel prices. The measure aims to mitigate the impact of sharp increases in oil, gasoline, and diesel prices triggered by the Middle East conflict — particularly the war in Iran and related supply disruptions.
Key tax adjustments ('Sanchez Shield')
The government has decided to significantly cut taxes that make up a large portion of the retail price per liter of fuel:
- VAT (IVA) on gasoline, diesel, electricity, and natural gas is reduced from 21% to 10% — the minimum rate permitted under EU rules.
- The Special Hydrocarbons Tax (Impuesto sobre Hidrocarburos) is lowered to the minimum level allowed under European regulations.
According to official estimates, these measures will lower fuel prices by €0.25–€0.30 per liter (in some calculations, up to €0.29–€0.30/L for gasoline 95). Consumer associations (e.g., FACUA) project a more conservative impact — around €0.16–€0.17 per liter — yet even this represents a meaningful relief for consumers.
Expected prices after implementation
(based on official government estimates and prices observed March 19–20, 2026)
- Gasoline 95: was ≈ €1.75–€1.80/L → expected ≈ €1.50–€1.60/L (a drop of €0.16–€0.29/L).
- Diesel A: was ≈ €1.90–€1.93/L → expected ≈ €1.65–€1.75/L (a drop of €0.17–€0.25/L).
Diesel remains more expensive than gasoline due to supply shortages at European refineries and persistently high demand.
The measures were published in the BOE (Official State Gazette) and entered into force on March 21, 2026 — prices at service stations are expected to be updated within 1–3 days.
Additional support measures
- Professionals (truckers, agriculture, fisheries): direct subsidy of €0.20 per liter of diesel used for professional purposes.
- Electricity and natural gas: VAT reduction to 10%, abolition or reduction of the 7% electricity generation tax and other levies — resulting in noticeably lower utility bills.
- Electric vehicles: extension of the 15% tax credit for purchasing new EVs through the end of 2026.
This is the second such ‘energy shield’ introduced in recent years. We hope it will effectively stabilize the situation and provide much-needed relief to drivers, transport operators, and households.