War in the Middle East: rationing, teleworking… from Spain to India, how countries are organizing in the face of rising oil prices

Since the start of the war in the Middle East on February 28, and the blockage of the Strait of Hormuz through which a quarter of global oil trade passes as well as significant volumes of liquefied natural gas and fertilizers, the cost of energy has continued to rise around the world.

Prices at the pump have kept pace with barrel inflation and drivers are sticking their tongues out. Faced with discontent and fears of recession, countries are organizing.

Everyone has their own strategy. If France, hampered by its budgetary difficulties, has targeted the most fragile professions such as farmers, fishermen and small road hauliers, other States are making broader and more costly choices.

Tax reduction in Norway, Poland and Spain

The latest is Norway, which has adopted a vast plan to reduce taxes on fuels. From Wednesday, and for three months, taxes on gasoline will be reduced by 4.41 crowns per liter (39 euro cents) and those on diesel will be lowered by 2.85 crowns per liter (25 euro cents). The reduction, carried by Parliament despite the government’s refusal, also applies to mineral oils used for fishing and hunting, the government said.

Parliament estimated the cost of this tax cut at 6.3 billion crowns (560 million euros) last week, a relatively low cost which can be explained by the fact that almost a third of the car fleet in Norway is made up of electric cars, to which are added 12.6% hybrid cars.

Poland, for its part, announced to reduce VAT and set a ceiling price. Likewise in Spain, Parliament approved the reduction to 10% of VAT on gas and fuels, compared to 21% previously. And in Italy, a decree-law reduced the price of fuel by 25 cents per liter. Similar measures have been taken in Portugal and Sweden.

Rationing and subsidies in India, Greece and Slovenia

Greece has launched four “targeted” subsidies totaling 300 million euros on automobile and maritime fuels, diesel and fertilizers which will be introduced by the government in April and May. In Australia, Prime Minister Anthony Albanese announced this Monday a drop of 26.3 cents (16 euro cents) per liter of gasoline and diesel sold. The bill is expected to amount to 2.55 billion Australian dollars, or 1.5 billion euros. On Saturday, the states of Victoria and Tasmania said they were implementing free public transport, one month for the first, three for the second.

The United Kingdom is currently proceeding like France two weeks ago, by threatening distributors with sanctions if they exaggerate the impact of the increase on prices at the pump. The Starmer government has, however, promised help for low-income households who use domestic fuel for heating.

Slovenia is, to date, the only EU member state to ration fuel. The measure seems symbolic: individuals are only entitled to 50 liters per day, businesses and farmers can obtain 200 liters.

While rationing purchasable quantities, India also lowered taxes on gasoline and diesel intended for domestic consumption on Friday by 10 rupees per liter (9 euro cents), and imposed customs surcharges on fuels exported outside the country.

Many governments are pressing other levers, in particular by authorizing the use of less refined, but much more polluting, fossil fuels, or by inviting the population to reduce their travel, as during the Covid era.

Teleworking, days off and cycling

Thus in Egypt, stores, restaurants and cafes have been ordered to close earlier since Saturday, while a day of teleworking is imposed on all “non-essential” workers. Ethiopia furthered this logic by asking state-owned enterprises and public institutions to furlough non-essential staff. As for the Philippines, they established a four-day week for civil servants as part of the national state of emergency. With 98% of its oil imported from the Gulf, this Asian country has seen the price of diesel and gasoline more than double.

In Sri Lanka, a country which is only just emerging from a financial crisis, Wednesday has been declared a non-working day for schools, universities and government institutions. Fuel is also rationed at 5 liters per week for motorcyclists, 15 for motorists.

In Thailand, employees were authorized to remove their jackets to carry out their jobs in shirts, making it possible to reduce the consumption of air conditioners. Civil servants who can work from home.

In Myanmar (formerly Burma), the circulation of private vehicles – except electric – is only authorized every other day, depending on their license plate. A QR code system per vehicle makes it possible to monitor each person’s consumption. Vietnam has decided to merge all these ideas by calling on the population to favor cycling and walking, while temporarily suspending its environmental tax on gasoline and diesel.