How European countries deal with rising gasoline prices

According to data from the European Commission (EC), conflict in the Middle East has pushed fuel prices up across the region, from 0.1% to 5% depending on the country. Leading the climb are gasoline prices in Germany with nearly 5%, Estonia and Luxembourg around 3.5%.

In France and Austria, gasoline prices inched up about 2% while Slovakia and Hungary only recorded an increase of 0.1%. As of May 16, three countries saw gasoline prices exceeding 2 euros per liter, compared to the bloc’s average of about 1.8 euros.

Accordingly, drivers in the Netherlands are facing the highest gasoline prices in Europe, on average 2.26 euros per liter, followed by Denmark (2.17 euros) and Germany (2 euros). To cope, some countries have Limit the frequency of price adjustments.

Germany requires gas stations to only increase prices once a day, while reducing prices whenever possible. Meanwhile, Austria allows price adjustments up to 3 times per week. The goal is to limit speculation, although economists debate the actual effectiveness.

Another popular remedy is impose a ceiling on fuel prices or profits trade in this product. On March 10, Slovenia limited gasoline prices to 1.47 euros per liter. However, the policy was quickly exploited, forming a trend of “fuel tourism”, when drivers from neighboring countries flocked to buy gasoline.

“There has been a situation where dozens of gas stations in northern Slovakia are almost completely depleted,” Prime Minister Robert Fico confirmed. Therefore, on March 18, he allowed gas stations to apply their own prices, based on average fuel prices in neighboring countries such as the Czech Republic, Austria and Poland, for vehicles with foreign license plates. Stations are also limited to the amount of diesel they sell at a full tank and a maximum of 10 liters more.

Implementing a similar measure but only applying to domestic vehicles from the beginning, on March 12, Hungarian Prime Minister Viktor Orban set a ceiling price for gasoline at 595 forints (1.51 euros) per liter and diesel at 615 forints (1.56 euros) per liter.

In addition, in order for gas stations to maintain profits, the government provides fuel from strategic reserves at preferential prices and tax breaks. The monthly impact of these measures on the budget is estimated at 25 – 30 million euros.

Greece imposes profit margin ceiling on gas stations and fuel distributors for 3 months. According to Prime Minister Kyriakos Mitsotakis, the decision was made because “economic fluctuations must not lead to speculation”. He also imposed a ceiling on profit margins for food and consumer goods.

In Italy, Prime Minister Giorgia Meloni’s government is considering activation mechanism “Flexible special consumption tax” (mobile excise), allows the use of increased VAT revenue due to high gasoline prices to reduce special consumption taxes on this item. In addition, the economic police will inspect and fine gas stations that do not display the national average fuel price in addition to the specific price of the point of sale.

Without directly intervening in gasoline prices, the Spanish government is preparing to launch indirect support measures such as banning layoffs for energy-related reasons, travel allowances, tax breaks for industries heavily affected by rising fuel prices, freezing rent prices and limiting tenant evictions.

Meanwhile, the Nordic community appears Don’t care about rising gas prices. To date, Sweden, Denmark, Finland and Norway have not introduced any measures. Gas prices have not yet become a hot topic in the media or politics.

This is especially true in Norway, where almost all new cars sold are electric and about a third of the vehicles on the road do not use fossil fuels. Sweden has reduced many gasoline taxes from 2024, helping current prices (1.6 euros per liter of gasoline and 1.95 euros per liter of diesel) remain significantly lower than in the 2022 – 2023 period.

Not belonging to the European Union, the UK has not yet taken any special measures. Average fuel prices up to March 12 were £1.40 per liter of petrol and £1.58 per liter of diesel, according to Fuel Finder UK, benefiting from fuel tax freeze has lasted for many years. On March 11, British Prime Minister Keir Starmer stated his intention to review this policy but is facing opposition from conservatives.

On March 19, European Union leaders met to find a solution to curb the spike in energy prices, including gasoline and gas, due to the Middle East conflict. Lithuanian Energy Minister Zygimantas Vaiciunas said “there is no magic tool or solution that can easily solve the challenge” in the short term.

European Commission President Ursula von der Leyen presented no major interventions. She only proposed adjusting the bloc’s emissions trading system (ETS), cutting energy taxes in member states or subsidizing struggling industries.

Theo Reutersnone of these options are expected to significantly reduce energy prices while the Strait of Hormuz remains closed. Even the proposal to intervene in the ETS faced opposition from Spain and the Netherlands, due to concerns about weakening the bloc’s efforts around climate policy.

Or the idea of ​​increasing subsidies also raises concerns about a deeper divide between rich and poor countries. In addition, calls to cut energy taxes are also a challenge for governments racing to increase defense spending.