Spain is preparing for a new round of economic measures as rising inflation and fuel prices put pressure on households and businesses, with the current package of anti-crisis support due to expire on September 30.

The government is discussing which measures should be maintained, adjusted or replaced from October, but no extension had been formally approved as of September 19.

Current measures due to expire

The existing support package was introduced in response to the economic effects of the war in Iran and subsequent pressure on energy markets.

Royal Decree-Law 18/2026 established a gradual withdrawal of several measures during July, August and September, with specific support maintained for sectors considered particularly exposed to fuel costs.

The legislation currently provides for the end of the main temporary measures at the close of September.

Government begins negotiations for October

The Economy Ministry has opened discussions with trade unions and employers' organisations about what support may be needed beyond September 30.

The government says it intends to build on the existing measures and continue supporting households and businesses affected by rising prices, with particular attention being given to transport and the agri-food sector.

Further meetings are expected as officials assess which sectors are facing the greatest pressure.

Several proposals are on the table

The Labour Ministry has presented a package of measures it considers necessary as part of the next response.

Its proposals include extending provisions of the existing anti-crisis decree, introducing a temporary levy on the refining sector, taking action on rents, addressing purchasing power and grocery costs, and restoring a mechanism designed to protect against unusually high gas prices.

These remain proposals rather than measures approved by the government.

Other organisations involved in the negotiations have called for a more targeted approach focused on the sectors and consumers most affected by higher energy costs.

Inflation reaches 4.3%

The discussions come after Spain's annual inflation rate rose sharply in August.

The National Statistics Institute reported an annual CPI rate of 4.3%, seven tenths of a percentage point higher than in July and the highest level recorded since February 2023.

Core inflation, which excludes unprocessed food and energy products, stood at 2.9%.

The transport category was one of the main drivers of the increase, with its annual rate reaching 9.5%, largely because of higher fuel and lubricant prices.

Balearic Islands above the national rate

The pressure is particularly relevant to the Balearic Islands, where annual inflation reached 4.4% in August, slightly above the national rate of 4.3%.

Higher transport and energy costs have implications for residents, businesses and sectors that depend heavily on road, maritime and air transport.

For islands such as Ibiza and Formentera, where much of the economy is linked to tourism, logistics and transport, changes in fuel and energy costs can feed through to other operating expenses.

Fuel support remains temporary

The current legislation includes temporary reductions in hydrocarbon taxation for petrol and diesel.

The measures were designed to adjust according to the movement of fuel prices, with the September reduction increased when the relevant inflation threshold was exceeded.

The current tax arrangements apply only through September.

Separate temporary support has also been provided for agricultural diesel and for road transport operators affected by higher fuel costs.

Diesel prices remain under pressure

The latest European Commission Oil Bulletin, dated September 17, shows that fuel prices remain a closely watched issue across Europe.

National fuel prices in Spain have continued to rise during September, adding pressure despite the temporary tax reductions.

The government has therefore been balancing two competing considerations: providing relief to households and businesses while gradually withdrawing emergency support as originally planned.

Employers call for targeted measures

The Spanish business organisation CEOE has called for any continuation of support to focus on sectors and consumers most affected by higher energy costs.

It has also pointed to structural energy costs, including taxation and charges associated with electricity, gas and renewable fuels.

The approach differs from proposals calling for a broader extension of existing measures.

Trade unions seek wider protection

The main trade unions are pressing for additional measures to protect household purchasing power.

CCOO has called for continued support and has proposed additional assistance for people with below-average incomes, while also calling for greater oversight of the fuel-price chain.

UGT has similarly argued for maintaining existing protections and introducing further measures should price pressures persist.

These positions form part of the ongoing negotiations and do not represent decisions already adopted by the government.

Fiscal room is becoming tighter

The debate is taking place against a warning from Spain's independent fiscal authority, AIReF.

AIReF President Inés Olóndriz said on September 17 that Spain's room for additional spending is becoming increasingly limited.

The authority's latest monitoring puts Spain's 2026 deficit at 2.7% of GDP and points to a reduction in fiscal room as expenditure continues to rise.

AIReF has said that any additional measures would need to be adequately financed.

What happens after September 30?

The government's immediate task is to determine which measures should continue after the current legal framework expires.

The choices could include extending existing support, replacing some measures with more targeted assistance or allowing temporary measures to end as scheduled.

No final package had been announced by September 19.

What it could mean for the Balearics

The outcome will matter beyond mainland Spain.

Households across Ibiza and the Balearics are exposed to the same national fuel and inflation pressures, while island businesses can be particularly sensitive to transport and logistics costs.

Agriculture, food distribution, hospitality and other sectors that depend on fuel and energy will be watching the negotiations closely.

The Balearic Islands entered the autumn with inflation slightly above the national average, making any change to fuel, transport or household support measures relevant to the region.

Spain approaches a key deadline

With less than two weeks remaining before the current measures expire, the government is now under pressure to decide how much emergency support should continue into October.

The existing legislation provides a clear September 30 end date for many of the measures, but the discussions now under way could result in new or extended support.

For the moment, the important distinction is that Spain is negotiating its next response to rising prices, rather than having already approved the extension suggested by the original headline.