Record fuel prices across EU prompt calls for bloc-wide windfall tax on firms

French President Emmanuel Macron announced plans to convene a G7 meeting in the coming weeks to address the ongoing energy crisis, citing the impact of the Iran war on global energy security. He emphasized that France is actively working to facilitate the peaceful reopening of the Strait of Hormuz, a critical maritime passage for oil shipments. The summit will focus on coordinating strategic stockpile levels, enhancing cooperation on exports and production capacity, and exploring the possibility of releasing strategic reserves to stabilize markets. Macron reiterated the importance of maintaining stability and avoiding unnecessary tensions among G7 nations and their key partners. France faces mounting pressure due to sharply rising fuel prices, with pump prices reaching historic levels and affecting household purchasing power. Macron acknowledged the strain on consumers and highlighted the need for coordinated action. Earlier this year, France launched an international defense mission with the International Maritime Organization to escort vessels through Hormuz once an agreement is reached. However, he noted that the reopening of the strait depends on a deal between Iran and the United States, which appears unlikely in the short term. Across the European Union, fuel prices have hit record highs, prompting discussions about implementing a bloc-wide windfall tax on energy companies. German Finance Minister Lars Klingbeil urged the European Commission to propose such measures, arguing that oil companies are profiting excessively from the current situation. Oil futures have climbed above $100 per barrel, marking a 50% increase since the start of the Iran war. Traders expect prices to remain elevated in the near term, with no signs of immediate decline. In Germany, diesel prices reached a record average of €2.45 per liter, while petrol hit €2.31 per liter. In the Netherlands, petrol prices surpassed previous records, reaching €2.73 per liter, and diesel averaged €2.78 per liter. Across the EU, petrol prices are 24% higher than a year ago, diesel is up 38%, and jet fuel costs more than double its previous level. Benchmark gas prices have surged to €81 per megawatt hour, up 150% compared to the same period last year, with analysts predicting further increases. The EU’s Economic Commissioner, Valdis Dombrovskis, stated that there are currently no plans for an EU-wide windfall tax, though the commission is open to discussing potential solutions. Member states retain the authority to implement their own taxation policies. High fuel prices have become a major domestic political issue in several EU countries, particularly France and Italy, both of which face crucial elections next year. Political leaders are under pressure to manage public dissatisfaction over the rising cost of living, driven largely by energy prices. In Italy, Prime Minister Giorgia Meloni’s right-wing coalition announced plans to abolish road taxes for 14.5 million vehicles and motorbikes, costing over €2 billion, in addition to existing cuts to diesel duties. She argued that these measures would provide relief to everyday commuters. Meanwhile, in France, fishermen staged protests against rising diesel prices, blocking access to two ports and a fuel depot in southern France. After negotiations, the government promised zero-interest loans and support tied to fuel price fluctuations to ease the burden on affected communities. French Prime Minister Sébastien Lecornu extended emergency fuel subsidies for the agriculture, fishing, and construction sectors until the end of the year. However, the government remains hesitant to introduce broad-based price reductions, opting instead for targeted interventions to mitigate the impact of high energy costs.