From the Guardian · · 2m
EU fuel crisis sparks windfall tax push
Record petrol and diesel prices across Europe are forcing governments to consider taxing energy firms and cutting fuel taxes ahead of major elections.
In brief
Record petrol and diesel prices across Europe are forcing governments to consider taxing energy firms and cutting fuel taxes ahead of major elections. European leaders facing elections next year are scrambling to address soaring fuel costs through windfall taxes on energy companies and emergency tax cuts, as far-right…
EU fuel prices hit record highs
Petrol is up 24% and diesel up 38% across the EU compared to a year ago. Germany saw diesel reach €2.45 per litre and petrol €2.31, while the Netherlands hit €2.73 for petrol.
“Pump prices have already reached all-time highs across Europe.”
Middle East crisis drives oil above $100
Oil futures climbed back above $100 a barrel, about 50% higher than before the Iran war, as escalating Middle East attacks threaten supply routes. Traders expect prices to stay elevated.
“Oil futures have climbed back above $100 a barrel, about 50% higher than before the Iran war”
Germany calls for windfall tax
Finance minister Lars Klingbeil demanded the European Commission propose ways to tax excessive profits of oil companies, saying firms are exploiting the situation and overcharging consumers.
“People can see how oil companies are exploiting the situation, overcharging and significantly increasing their profits.”
EU Commission stays cautious
Economic commissioner Valdis Dombrovskis said the Commission has no plans for an EU-wide tax mechanism at this stage but is ready to discuss it. Member states remain free to impose their own taxes.
Italy cuts road tax amid election pressure
Giorgia Meloni's coalition announced it would scrap road tax for 14.5 million cars and motorbikes from next year, costing over €2 billion, on top of a €2.8 billion diesel duty cut already implemented.
France extends fuel subsidies selectively
Prime minister Sébastien Lecornu extended emergency fuel subsidies until year-end for agriculture, fishing and construction sectors. The government resists blanket price cuts, citing cost concerns.
“Blanket measures that affect everyone, including those who don't need them, are a false economy”
German chancellor announces fuel tax cut
Friedrich Merz announced a €0.17 fuel tax cut from October through year-end and plans talks with oil firms to introduce a price cap by January 2027, citing citizens reaching breaking point.
“Anyone who relies on their car every day is reaching breaking point”
Far-right gains on cheap energy promises
The far-right AfD heavily defeated Merz's CDU in state elections this month and is campaigning on returning to cheap Russian gas imports Europe abandoned after Russia's 2022 invasion of Ukraine.
Elections next year amplify urgency
Eight EU countries including France, Italy, Spain and Poland face elections in 2026. Leaders are scrambling to contain public discontent over soaring energy costs before voters go to the polls.
The big picture
European leaders facing elections next year are scrambling to address soaring fuel costs through windfall taxes on energy companies and emergency tax cuts, as far-right parties gain ground on promises of cheaper energy.
