Europe expands fuel relief as Iran war drives gasoline and diesel prices higher

  • European governments expanded fuel relief measures as war-driven energy costs strained households and businesses.
  • Germany’s renewed tax cut lowers gasoline and diesel prices by €0.17 per litre through December.
  • EU countries are releasing 400 million barrels from strategic reserves under an IEA agreement.

European governments are expanding subsidies, tax cuts and energy policies to cushion households and businesses from record gasoline and diesel prices driven by the Iran war, Russia’s war in Ukraine and disrupted energy supplies. The OECD said seven of the 10 countries taking the most active steps to limit the economic damage are in the European Union. Measures include Germany’s renewed €2.5 billion fuel-tax reduction, which cuts gasoline and diesel prices by €0.17 per litre from Oct. 1 through the end of the year, and Spain’s extended tax relief and €5 billion support package. France approved a €450 million expansion that includes €100 payments for 5.5 million eligible workers, early energy vouchers for 5.8 million families and extended support for fuel-intensive industries. EU leaders have allowed temporary state aid for households and energy-intensive sectors while permitting certain investments to strengthen energy security. The bloc imports nearly all of its oil, 85% of its natural gas and 57% of its total energy needs, leaving it increasingly reliant on external suppliers, including the United States. EU countries are also drawing on strategic reserves under an International Energy Agency agreement to release 400 million barrels, while Brussels opposes proposals to suspend U.S. diesel exports.

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