The Government has yet to activate any aid plan to mitigate the impact of energy prices on households, businesses, and the self-employed. Consequently, public coffers are amassing millions following the restoration of tax rates that had been previously reduced after the war in Ukraine.
Specifically, the recovery of VAT, the end of the gas price cap, and the progressive increase in electricity taxes pushed tax collection at the end of February above 2.1 billion euros, according to data provided by the Ministry of Finance. This figure must now be bolstered by the windfall revenue stemming from the surge in energy prices triggered by the Middle East conflict.
Diesel prices have skyrocketed by 40 cents in just over a week (reaching an average of 1.86 euros), while gasoline has risen by 20 cents (averaging 1.70 euros per liter). Taking the consumption levels reached in March 2025—which exceeded 3.733 billion liters—and the price increases since the start of the conflict as a reference, the math is clear. With VAT at 21%, the Treasury would collect 39 cents per liter of diesel (8.4 cents more than before the war) and 36 cents for gasoline (4.2 cents more). This translates into over 284 million euros—nearly 255 million from diesel and 29 million from gasoline. To this figure, one must add the revenue from the Special Tax on Hydrocarbons (IEH), which collects an average of approximately 700 million euros monthly.
On the other hand, the average price of electricity in the wholesale market remains soaring; yesterday it increased by nearly 15%, reaching 136.86 euros/MWh. This is its highest level in over a year, confirming a 390% increase compared to the 28.43 euros recorded last Tuesday, and a staggering 2,800% rise over the 4.69 euros seen a month ago on February 10. Furthermore, in year-on-year terms, the price increase stands at 47.2%.
Regarding natural gas prices on the Dutch TTF market (the European benchmark), they fell below 50 euros/MWh, but have accumulated a revaluation of around 70% since February 28. This is due to market fears of energy supply disruptions resulting from the conflict and the potential closure of the Strait of Hormuz. In total, across the three bills (fuel, electricity, and gas), revenue is expected to far exceed 300 million euros this month alone.
While the Government claims to be studying measures to alleviate the situation, tax revenue continues to rise. The PP (People’s Party) has moved ahead by proposing a fiscal package that highlights reducing VAT on energy to 10%, lowering personal income tax (IRPF), and the abolition of the electricity generation tax.
