Europe Battles Record Fuel Prices Amid Middle East Wars

European governments are scrambling to contain the economic damage from record-high fuel prices caused by wars in the Middle East and Ukraine. The Organisation for Economic Co-operation and Development (OECD) reports that seven of the 10 nations actively working to mitigate this issue are part of the European Union. Lithuania has cut train ticket prices in half, while Greece is taxing gambling more to fund public relief efforts. Italy has delayed the demolition of coal-fired power plants and reduced paperwork requirements for oil and natural gas projects.

The Netherlands is increasing funding for a program providing free energy-saving services in homes, and Poland has proposed heavily taxing record profits from certain fuel producers and sellers. The EU imports nearly all its oil and 85% of its natural gas, making it highly reliant on gas imports. As pump prices surpass $12 a gallon in some countries, Europeans are spending an extra $231 million per day just for diesel fuel.

Some European governments are spending billions to help their countries weather the energy crisis. The EU has given member nations temporary discretion to provide state aid to households and energy-intensive industries. French President Emmanuel Macron is asking European Commission President Ursula von der Leyen to promote a relaxation of EU fuel quality regulations to increase diesel production in Europe.

Macron has also called for raising the EU limit on conventional biodiesel content in standard diesel fuel from 7% to 10%. The French government announced a €450 million package to expand its relief measures, including means-tested aid for people who drive more than 30 kilometers round trip to work or annually for professional purposes. Macron will deploy French troops and radars to Saudi Arabia to help protect energy infrastructure.