And it could get worse: Europe struggles with record fuel prices

Governments are slashing taxes and offering subsidies to soften the blow of $10 a gallon diesel, with the wars in Iran and Ukraine driving dizzying cost spikes.(CN) — With fuel prices at record highs, European governments are scrambling to contain growing unrest and cushion sluggish economies from a worsening global energy crunch.Across Europe, governments are slashing fuel taxes, easing environmental rules and offering subsidies to keep prices from soaring even further.Still, these measures may not be enough to quell mounting frustration from spilling over into mass protests and strikes by truckers, farmers, fishermen and motorists.The average price of diesel across the European Union soared this week to a new high of 2.23 euros ($2.54) a liter, equivalent to about $9.63 a gallon in the United States, according to an analysis by Agence France Presse.Diesel has surpassed $10 a gallon in several European countries, including France, Germany, the Netherlands, Belgium, Finland and Denmark. Gasoline prices are lower, but they too are at their highest levels since the EU began tracking prices in 2005.EU drivers are spending an extra $231 million a day on diesel, according to Transport & Environment, a nonprofit group. The EU imports almost all the oil it uses and 85% of its natural gas.And things could get even worse.This week, Europe was shocked by reports that U.S. President Donald Trump is considering a 90-day ban on diesel exports to rein in rising prices ahead of November’s midterm elections. The EU gets about half of its diesel from the U.S.On Thursday, the EU warned the White House against such a move, saying it would hurt both the U.S. and the EU.Europe has been reeling from the supply shocks caused by the closure of the Strait of Hormuz and Ukrainian drone attacks on Russian oil refineries. Worldwide, the daily flow of oil has been cut by about 10 million barrels.The energy crunch has only gotten worse in recent days, since Yemen’s Houthi rebel forces seized swaths of the Red Sea coast and imposed a naval blockade on Saudi Arabia’s tankers at the Bab el-Mandeb Strait. Houthi forces are striking Saudi Arabia’s territory, damaged its key East-West Pipeline and struck Saudi oil infrastructure.The Houthi advances have forced Europe to act.On Thursday, French President Emmanuel Macron announced France will send soldiers, radars and air defense systems to Saudi Arabia to help protect the oil export site at Yanbu.France’s move came three days after British Prime Minister Andy Burnham said the Royal Air Force would help Saudi aircraft with air-to-air refueling.Meanwhile, tax cuts have become a favorite option for easing the pain at the pump. Across Europe, taxes make up about two-thirds of the cost of fuel.On Friday, Germany’s Parliament cut a gas and diesel tax, a move costing about $2.85 billion in lost revenues. Spain, Italy, Romania, Portugal and Belgium are among other EU nations that have slashed fuel taxes.To offset the crunch, EU nations have also tapped into their strategic oil reserves.As colder months approach, the EU faces problems with gas reserves. Storage is only about 69% full, well below the typical 85% for this time of year. Companies hesitated to buy gas at high summer prices.The soaring costs are fueling frustration.In France, calls to revive the disruptive 2018 “yellow vests” fuel tax protest movement have picked up steam, a development that could give even more energy to the campaign of far-right leader Marine Le Pen as she seeks to win next year’s presidential election.This month, fishermen in southern France have blockaded ports and oil depots as they demand fixed diesel prices and more aid.Earlier this week, France announced more than $500 million in new aid to help industries and workers struggling with high prices.Courthouse News reporter Cain Burdeau is based in the European Union.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads