Transport, food, fuel, electricity and gas prices in Spain: this is how they will change in 2025

January is always a steep month for family budgets, but this year price increases in Spain will be reflected in even more household items. Despite this sad news, the increases will be more moderate than in the past, such as when the whole of Europe was immersed in an inflationary crisis following the outbreak of war in the Ukraine in February 2022 and energy prices soaring. The financial experts estimate that inflation closed 2024 at 2.8%, still above the European Central Bank's (ECB) price target of 2%, but considerably more moderate than the 3.5% with which 2023 ended and nothing like the 8.4% that ended 2022. The Bank of Spain estimates that inflation will moderate to the end of 2025 at 2.1% and will then drop down to 1.7% by the end of 2026.

As of 1 January Spain's reduced IVA sales tax on foodstuffs is no more, IVA on electricity has returned to its usual 21%, and other services such as internet, road toll charges and parcel delivery services will rise in line with the CPI (consumer price index). The only item that will continue to be subsidised will be public transport, after central government decided to extend for an extra six months the discounts that have been applied for the last two years. The main price increases hitting our wallets for the new year are detailed below:

Food inflation has been contained during 2024 to below 2% in December from the 7.5% we saw at the beginning of 2024. The government in Madrid extended the IVA tax rebate on basic foodstuffs until July, but after that IVA has been gradually clawed back up to 1 January, so now all foodstuffs will return to their pre-crisis IVA rate. This will generate price rises on the supermarket shelves in the coming months with the exception of olive oil, whose IVA has been permanently kept down at 4%.

Petrol and diesel prices rose sharply in 2023 following the removal of the state subsidy of 20 cents per litre, but they smoother out as the months went by and 2024 was a year of little change for these products. The price point for Brent crude oil hovered around 75 dollars per barrel in the last week of the year, with a litre of petrol averaging 1.53 euros at Spanish service stations and a litre of diesel at 1.45 euros. However, experts predict increases in fuel prices in 2025 and Spain's commitment to Brussels to bring diesel taxes into line with those of petrol will push up the price per litre by 10 cents from the time that promised measure comes into force.

On 1 January IVA on electricity was restored to 21% compared to 10% in the last two years, so bills will inevitably rise for all households at the start of the year. Vulnerable households will have a 50% rebate on their electricity bills until July, when it will be reduced to 42% and stabilise at 35% in 2026, compared to savings of 25% before the crisis.

Gas, on the other hand, has already experienced a tax increase in 2024, when tax cuts ended and IVA on gas returned to 21%. Its price will continue to be linked to how the politics and conflicts fare where the gas pipelines are located and analysts expect some increases in 2025, although not to the record levels of 2022.

The major operators in mobile and internet services have announced price increases for the third consecutive year in their tariffs. Last year was a very busy year in the telecommunications sector, with the state taking a stake in Telefónica, the sale of Vodafone Spain to Zegona and the merger of Orange and MásMóvil. Fierce competition from low-cost companies such as Digi is pushing internet tariffs down, but the big operators are fighting back with a commercial policy based on better services.

Movistar has announced price increases from 13 January in response to rising costs in the sector. Most increases will be less than six euros per month and the most common will be three euros. Vodafone will also raise prices by 3%, the same as the CPI, which will mean increases of around two euros on average on its customers' bills. Masorange has announced increases of between two and six euros per month.

Central government has approved the extension of public transport subsidies on trains and buses for a further six months to June end and a new plan from 1 July will be rolled out in the coming months. Thus, local ('Cercanías') and medium-distance ('Media Distancia') trains will continue to be free for frequent travellers during the first half of the year and 50% discounts will continue on multi-journey passes for metro, urban and interurban buses.

Airport charges will rise by 0.54% in 2025, as approved a few days ago by the CNMC (Spain's markets competition watchdog), a lower increase than requested by Aena, the company running most of Spain's airports. The increase will be much lower than the 4% increase approved for 2024, which airlines handled by raising ticket prices, but it is still expected that the tourist boom will cause prices to continue to rise.

Toll charges on motorways will rise by almost 4% from 1 January, sources from the private companies operating the concessions confirmed to SUR. This is two points lower than last year's increase but higher than inflation in 2024 (2.9%) to compensate the companies for the price cap they had to face in 2023. The Spanish government agreed with the concessionaires that on 1 January 2023 they would not increase tolls by 8.4%, something they should have done as this was in line with average inflation in 2022, so the companies had the increase limited to 4% in exchange for being compensating over the next few years with increases slightly above inflation to make up for 2023's price cap.

House prices soared during 2024, but 2025 will not bring better news for househunters, especially city apartments. The high demand and lack of supply of housing herald another complicated year with price rises above inflation. Forecasts from the Pisos.com platform point to a rise in prices in 2025 of over 10%, both in sales and rentals. Buying a property will be up to 12% more expensive than this year, slightly below the 14% increase in 2024. For rentals, experts estimate a rise of around 11%, up from 8% this year.

Posting the ordinary, standard weight, domestic letter, Correos' most widely used product, will rise by 8.5% from 1 January, seven cents more than in 2024 to 0.89 cents, the mail company confirmed. In addition, parcel services will increase their prices by 4%, twice as much as last year. These increases are well above inflation but below the rates in other neighbouring countries.