Record fuel prices across EU prompt calls for bloc-wide windfall tax on firms
German minister says companies are ‘exploiting situation’ in Middle East, as sky-high prices become major domestic issue for leaders
European governments have discussed imposing a bloc-wide windfall tax on energy companies, as near-record fuel and gas prices pile pressure on leaders desperate to contain mounting public discontent and the challenge of the far right.
With elections due next year in eight EU countries including France , Italy, Spain and Poland, leaders are scrambling to head off the potential fallout from what analysts have warned could be one of the continent’s biggest energy shocks in decades.
Germany’s finance minister, Lars Klingbeil, called on the European Commission at a meeting of EU finance ministers in Dublin on Friday to propose possible ways to tax what he described as the excessive profits of oil companies.
“Several member states have been calling for models for a long time,” Klingbeil said, demanding proposals by next month. “People can see how oil companies are exploiting the situation, overcharging and significantly increasing their profits.”
Oil futures have climbed back above $100 a barrel, about 50% higher than before the Iran war, as escalating attacks across the Middle East threaten more supply routes. Derivatives markets suggest traders do not expect a near-term drop in prices.
Pump prices have already reached all-time highs across Europe. In Germany, diesel prices surged to a record average of €2.45 a litre on Wednesday, while petrol hit a fresh high of €2.31 a litre, according to Europe’s largest motoring association, ADAC.
Prices are even higher in the Netherlands, where petrol eclipsed last week’s record high to reach €2.73 a litre on Wednesday, with diesel at an average €2.78 a litre. Prices have risen higher still for petrol in Denmark and for diesel in Finland.
Across the EU, petrol prices are 24% higher than a year earlier, while diesel is up 38% and jet fuel costs more than 100% more.
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