European governments introduce subsidies amid rising diesel prices

Across Europe, governments are rushing to protect consumers from a sharp rise in fuel prices: the conflict in the Middle East has disrupted global oil supply routes, diesel prices are approaching record levels, and protests have already broken out in France.

The latest escalation began with a drone attack on Saudi Arabia’s 1,200-kilometer East–West pipeline. According to Al Jazeera, Saudi Arabia shut down the pipeline on September 10 after drones launched from Iraqi territory struck near Riyadh and Medina. The Associated Press reported that the pipeline would remain largely non-operational for several weeks.

The incident threatens to disrupt supplies of up to 4% of global oil volumes. The price of Brent crude rose above approximately €98 per barrel as Houthi forces simultaneously tightened their control over the Bab-el-Mandeb strait.

Homayoun Falakshahi, head of crude oil market analysis at Kpler, told Euronews that between 3.5 and 4 million barrels per day of exports are at risk, along with an additional 1.5 million barrels destined for Saudi Arabia’s western refineries.

“Regardless of how the crisis ends, the situation is favorable for rising diesel prices,” Falakshahi said.

Protests in France over fuel prices

On Thursday, the price of diesel in France reached €2.37 per liter — just below the all-time high of €2.38, according to AFP data cited by Le Monde. Fishermen blockaded the ports of Nice and Sète, as well as an oil depot in Frontignan; since Monday, protests have spread across several southern departments of the country.

“We are really fed up with this,” fisherman Tony Dalmasso told AFP.

According to Reuters, the blockades are increasing pressure on the government of Prime Minister Sébastien Lecornu, which is preparing a deficit-cutting 2027 budget ahead of the presidential election. On Wednesday, Lecornu extended fuel subsidies through the end of the year: 35 cents per liter for fishermen, 20 cents for construction companies, and 15 cents for farmers. Meanwhile, TotalEnergies capped prices at its filling stations at €1.99 per liter, drawing long queues of motorists.

Europe-wide response

Italian Prime Minister Giorgia Meloni announced the abolition of the vehicle tax on low- and medium-powered cars — around 70% of the country’s total vehicle fleet — as well as a phased reduction in diesel prices set to begin on September 18.

Spain doubled its diesel tax rebate to 20 cents per liter from September 1. In Germany, where petrol and diesel prices have reached €2.45 per liter, measures under discussion include a temporary VAT reduction and direct payments to citizens, though Chancellor Friedrich Merz has yet to approve a final plan.

A European Commission spokesperson told Euronews that there are currently no supply problems in the EU, but acknowledged that further escalation of the conflict could strain markets further. Against the backdrop of rising prices at the pump, six EU member states at an informal meeting on September 18–19 called for the introduction of a windfall tax on energy companies.