National fuel price measures threaten to worsen energy crisis, ministers told

The EU’s fragmented national fuel price controls risk hampering efforts to tackle the new Middle East energy crisis, according to a confidential diplomatic note seen by Euractiv.

As the Strait of Hormuz, a global energy chokepoint, enters its fifth week of being locked down, EU energy ministers are moving up into crisis gear.

“28 days of conflict have already added €13 billion to the Union’s fossil fuels import bill,” reads a note sent to EU countries ahead of a videoconference of energy ministers on Tuesday afternoon.

Prices at the pump have surged past the €2 per litre mark across most of the bloc, with Eastern European countries resorting to capping prices and rationing refuelling, while others have slashed excise duties.

Ministers are told to “avoid uncoordinated and fragmented national responses and disruptive signals to the market” while the potential long-term impacts of a prolonged closure of the Strait are being analysed.

In the EU’s free-travel area, making use of neighbouring countries’ cheap fuel schemes is easily done. The Dutch head to Germany to fill up their tank, who in turn head to Czechia if they are able to.

“Counter-acting measures with cross-border effects, hampering trade or worsening supply and demand conditions by promoting ineffective demand behaviours risk exacerbating market instability,” the note adds.

Brussels insists the crisis remains a price issue, rather than one of supply, adding that for now shortages are only expected for diesel and jet fuel.

Ministers are not expected to shift the mode from price to supply crisis either, three EU diplomats told Euractiv. “The situation is different from 2021,” one diplomat said – referring to the post-Covid energy price surge that was at least in part fuelled by Russia choking gas flows to the bloc ahead of its full-scale invasion of Ukraine. 

(bw)