Spanish Prime Minister Pedro Sanchez has announced €16 billion ($17.5 billion) in state aid and loans to help businesses and households weather the sharp rise in energy costs due to the war in Ukraine.
The plan provides for tax cuts worth €6 billion and a further €10 billion in aid from the state-owned development bank ICO, Sanchez told business leaders in Madrid on Monday.
The government aims to reduce the price of petrol and diesel fuel for all consumers by 20 cents per litre. The state would contribute 15 cents and the oil companies 5 cents.
Last week, the government presented a similar measure aimed at carriers, who are on an indefinite strike due to high fuel prices.
The measures would initially apply until June 30 and is set to be officially approved by the Council of Ministers on Tuesday.
Meanwhile, Spain and Portugal are looking to decouple the price of electricity from that of gas.
The two countries are due to present a plan to the European Commission this week on how much the reference price of natural gas - which is used to calculate the electricity price - should be reduced.
The 'Iberian exception'
At an EU summit on Friday in Brussels, both countries had negotiated special national regulations for gas price caps for themselves in order to make electricity cheaper.
With the package of measures, Madrid is hoping to quell brewing discontent. In addition to energy price hikes, consumers and businesses are dealing with supply bottlenecks because of protests by truck drivers.
The government had already agreed with the representatives of the umbrella organization of the Spanish trucking companies, CNCT, on subsidies amounting to over €1 billion.
However, the president of the Platform in Defence of the Transport Sector, Manuel Hernandez, who had called for the protests and is not a member of the CNCT, described these subsidies as "crumbs and peanuts."
The organizers consider the bonus of 20 cents per liter insufficient and on Friday demanded 60 cents per liter. The truckers' protests are scheduled to continue into the third week until there is a better offer.
