Europe’s governments are cutting fuel taxes and distributing tens of trillions to help consumers, truckers, and farmers with rising energy prices. This is in response to the invasion of Ukraine by Russia.
However, it is not enough for those whose livelihoods depend on fuel.
Miguel Angel Rodriguez was among 200 concrete truck drivers who protested slow driving around Madrid this week. According to Rodriguez, filling up used cost 1,600 Euros ($1,760 per month), but since the beginning of the year, he has been spending 500 more euros due to the rising diesel price.
Rodriguez stated that he will strike because it is the same for everyone to go to work or stay home. Rodriguez warned that rising costs are part of a “disaster effect” that will only drive everyone to their ruin unless the government takes decisive action.
He is one of many protestors in the fishing and trucking industries to urge politicians to alleviate their financial woes. The war has intensified Europe ‘s dependence on Russian oil and natural gases. As households and companies face crippling energy bills and high pump prices, governments have few options for providing lasting relief. Volatility in energy markets controls oil and natural gas prices, which have soared and fuelled record inflation.
Italy, the Netherlands and Belgium, Greece, Swedenand Cyprus have made temporary efforts to help. They are reducing fuel taxes, offering heating and power subsidies, or rebates, as well as limiting energy costs for small and large businesses.
These measures are “rational” and could be sustained indefinitely, according to Elisabetta Cornago (a senior researcher at the Centre for European Reform) who specializes on EU energy policy.
She called them partial solutions, which “only make small differences.”
Cornago stated that the main problem with these measures to lower energy prices will also reduce incentives for energy efficiency and investment in green energy production. This could lead to longer-term adjustment pains.
The tool used by central banks to control inflation would also be ineffective at reining in energy prices, as European Central Bank President Christine Lagarde pointed last month. Cornago stated that rising energy prices were due to fundamental shifts within the energy markets.
At the European Council summit in Brussels on Thursday, the energy crisis will be a major topic. Leaders from Spain, Portugal and Italy will demand a coordinated, bloc-wide response to this urgent problem. Officials from the EU stated Tuesday that they are moving towards the common purchase of natural gas, and making sure the bloc’s storage areas are fully stocked.
Workers are now taking to the streets, as gasoline prices in the EU’s 27 member countries have risen by 40% compared to a year ago to an average of 2.02 euros per liter, which is equivalent to $8.40 per gallon.
Truckers across France were dissatisfied by the lack of aid and organized a day-of-action Monday. A group of independent drivers from Normandy and England staged a blockade to stop hundreds of trucks moving.
Royal Blood, a British hard rock band, was among the collateral damage. The band announced Monday’s cancellation via Twitter, stating that its gear was at a Paris service station and that protesters would not allow it to leave.
Hundreds of Cyprus livestock breeders protested Monday at the Presidential Palace demanding compensation for the sharp rise in animal feed prices due to higher fuel costs.
Spanish truck drivers have been disrupting fresh produce deliveries to supermarkets for over a week while farmers paraded their tractor through Madrid on Sunday. Cattle breeders vented milk outside government offices that they claim costs them more to produce than what they make selling it.
The trucker protests have caused chaos in Spain’s logistics, and the national fishing federation of Spain said that members couldn’t move their catch further inland from the ports to the markets.
Basilio Otero of the FNCP guild stated, “It doesn’t make sense to go out to sea to lose cash.”
Italian truck drivers, fishermen boat owners and crews have also protested over high fuel prices.
They take these actions despite the fact that governments have spent billions of dollars to assist households and businesses. France unveiled last week a multibillion-euro package of economic assistance, which includes partial subsidies for fuel for fishing boats and trucks in the next four month and 3 billion euros to assist some companies with their rising gas and electricity bills.
One-off subsidies are being offered by Greece to taxi drivers. Britain pledges support for households, as utility bills are expected to rise 54% in April due to rising natural gas prices.
Officials in Cyprus claim they have reduced fuel taxes to the “absolute minimal permissible” according to EU regulations. This will result in a loss of revenue for the government of 30 million euros.
Albania, which relies on hydroelectric dams to generate energy, is now facing a dry winter and will have to import fossil fuels. The government cut off power at some intersections and main roads, and employees work from home for up to three days to save energy. It pays up to 80% of the electricity bills for small and large businesses.
Cornago stated that there are two options to bring down long-term prices: investments in renewables, and measures such as better insulation of homes, or electrifying industries that depend on natural gas.
A proposal by the EU for a common strategic reserve of gas could be made in the near future to increase security of supply.
Cornago stated, “But realistically,” Cornago explained that refilling gas reserves in times of tight markets will also result in higher prices for consumers overall.
