Germany’s finance minister Lars Klingbeil called on the European Commission at a meeting in Dublin on Friday to present options by next month for a tax on the “excess profits” of oil companies. He said that several countries have long been pushing for such models and accused the companies of “exploiting the situation”, inflating prices, and significantly increasing profits.
Oil futures rose above $100 per barrel, about 50% above the level before the war with Iran, and derivatives markets do not expect prices to fall quickly. The rise is being driven by the escalation of attacks in the Middle East and risks to several supply routes.
Across Europe, retail fuel prices have already hit record highs. In Germany on Wednesday, diesel rose to an average of €2.45 per liter, and gasoline to €2.31; in the Netherlands, gasoline reached €2.73 and diesel €2.78 per liter. Across the EU, gasoline costs 24% more than a year ago, diesel 38% more, and jet fuel is more than twice as expensive. Benchmark gas is trading at €81 per megawatt-hour, 150% higher than a year ago, and analysts see room for a rise to €100.
EU Commissioner for Economy Valdis Dombrovskis said that the European Commission has “at this stage” no plans for a Europe-wide tax mechanism, but is open to discussion, and member states may introduce their own taxes. Against this backdrop, rising prices have become an important domestic issue ahead of next year’s elections in eight EU countries, including France, Italy, Spain, and Poland.
In Italy, Giorgia Meloni’s ruling coalition decided to abolish the road tax for 14.5 million cars and motorcycles from 2026, a move that will cost more than €2 billion; earlier, reducing the diesel excise already cost €2.8 billion. In France, President Emmanuel Macron demanded the government’s “full mobilization” on fuel supplies and prices, and French Prime Minister Sébastien Lecornu extended emergency subsidies for agriculture, fishing, and construction until the end of the year.
French fishermen on Thursday blocked access to two ports and an oil depot in the south of the country over expensive diesel, but after six hours of negotiations agreed to lift the blockade in exchange for a promise of interest-free loans for those with cash-flow problems. French Finance Minister Roland Lescure, meanwhile, called measures that affect everyone, including those who do not need them, “false economy”. In Germany, Chancellor Friedrich Merz promised measures “soon” to ease the impact of record fuel prices, and the two-month fuel tax cut introduced in May has already ended. Merz’s conservative bloc this month suffered a heavy defeat in the Saxony-Anhalt state election to the Alternative for Germany party, and two more state votes this weekend are also expected to boost right-wing populists.
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