There are extreme measures such as school closures and incentives for teleworking. However, intervention has been concentrated at fuel pumps, where the impacts of the conflict in the Middle East are felt directly in consumers’ pockets. On this trip around the world, we show how the main countries are responding to this energy crisis
The escalation in the Middle East brought a predictable consequence: a disruption in the energy market and, with it, the rise in fuel prices, which in Portugal are expected to increase again next Monday, expected for diesel and gasoline, at values that are slightly attenuated by .
It’s war feeling in our pocket, regardless of how far we are from the epicenter of the conflict. The focus is on the Strait of Hormuz, where a fifth of the world’s oil passes. Or it would pass, as Iran has banned all crossings, while continuing to attack targets in the area, including oil tankers.
Let’s see, case by case, what some countries are doing.
Portugal
The Government temporarily reduced the fuel tax (ISP). The discount is valid when there is an increase in the price of gasoline and diesel above 10 cents, in order to compensate for the additional ICMS collection. In addition, Prime Minister Luís Montenegro also announced that of the strategic oil reserves, as part of the joint initiative of the International Energy Agency (IEA), that it will proceed with approximately 400 million barrels.
France
Paris is following a different strategy, focusing more on strengthening inspections and price controls at gas stations. It is also possible to apply a limit to distributors’ profit margins. France also adheres to the release of strategic oil reserves, with around 14.5 million barrels. Due to budget restrictions, and despite pressure from the far right, no subsidies or tax cuts are planned.
United Kingdom
A similar strategy is being followed in the United Kingdom. To avoid speculation and undue profits, London is betting on inspection of gas stations. At the same time, it is putting political pressure on operators to guarantee a “fair price” for all parties. Consumers are encouraged to make price comparisons through existing digital platforms, with companies in the area having to update the available information, under penalty of penalties. A change in taxes is also possible if the crisis continues.
Spain
The neighboring country is following a more price-focused approach. A direct discount on fuel prices is being considered, of up to 20 cents per liter, as happened when the war in Ukraine began in 2022, despite pressure from oil companies to the contrary, as they would have to contribute part of the discount. Added to this are other fiscal measures and economic support for both families and companies – for example, a reduction in taxes applied to electricity bills. Finally, Spain will also participate in the joint effort to release strategic oil reserves.
Italy
Italy is also taking the path of putting pressure on energy companies, threatening to tax excessive profits. In terms of taxes, Rome is studying the cut in the special tax on fuels and is considering the activation of an adaptable tax, which adapts according to the values of oil prices. The path is also made by putting pressure on the European Union to suspend climate costs that make energy more expensive.
Germany
In addition to joining the effort to release part of its strategic oil reserves, with practically 20 million barrels, Germany is, at home, seeking to limit price increases at the pump. German Chancellor Friedrich Merz has already argued that the country cannot, for the sake of solidarity with Ukraine, relax the sanctions applied to Russia.
Hungary
Budapest adopted a different stance, with an interventionist approach. The country is applying maximum ceilings for gasoline and diesel at pumps. In other words, stations cannot sell fuel at prices above the established limits. This ceiling only applies to vehicles registered in Hungary, to prevent abuse. Hungary applies the release of strategic reserves. On a political level, as expected, Kremlin ally Viktor Orbán has been pushing to ease sanctions on Russian energy.
Norway
Norway, unlike many European countries, rejects energy price caps. This Nordic country, which is the main oil producer in Europe, argues that the biggest contribution to stabilizing prices is ensuring consistent levels of production and exports. Prime Minister Jonas Gahr, Støre even stated that it would be “reckless” to apply a cap to the price of gas, because it would increase demand at a time of limited supply – which could, in Oslo’s view, worsen the crisis.
United States of America
Reduce logistical obstacles and increase supply. These are the two pillars of the North American strategy. One of the paths could be through the release of oil from the strategic reserve. Additionally, Washington DC is working to lift domestic shipping rules, allowing more foreign boats into American ports. Donald Trump’s government has also sought to reassure consumers and markets, with the idea that the impact is temporary. It is also important to note that, before the concerted attack with Israel on Iran, which escalated the conflict in the Middle East, the US had taken action in Venezuela, in order to depose Nicolás Maduro and close partnerships in the oil sector. Furthermore, the Trump administration has already admitted easing sanctions on Russian oil in order to balance the market.
Pakistan
It is one of the most extreme examples. Schools closed for two weeks, university classes were held online, civil servants worked from home, the work week was reduced to four working days. This is how Pakistan is reacting to this energy crisis, serving as an example for what is also happening in other Asian economies considered more fragile. In the Philippines, a four-day work week was also implemented for civil servants to avoid unnecessary travel. Thailand and Vietnam, for example, are encouraging teleworking. Everything to reduce fuel consumption.
India
India is particularly feeling the impacts, as it was one of the largest importers of Middle Eastern oil. The strategy is to keep prices stable, with the executive absorbing part of the shock, and the search for new oil and gas suppliers. The government proposed an economic stabilization fund to respond to this type of impact. Another crisis management concerns cooking gas, with orders to reinforce production and appeals to the population to avoid panic buying so as not to put further pressure on supply. Added to this is an appeal to consumers to switch to piped gas.
China
China is the world’s main oil importer and, therefore, the impact of this crisis is also felt in the East. Beijing’s strategy has been towards a controlled increase in prices, with regular price reviews through the sector regulator. Even so, it applied the biggest increase in gasoline and diesel price ceilings in four years. To guarantee internal supply, the path also involves suspending fuel exports, adjusting production in refineries and using strategic reserves. Furthermore, the strategy of investing in renewable energy and the electrification of the economy is intensifying, which, according to several analysts cited by the international press, could show how China will overcome this difficult context.
