MADRID (AP) — European governments are slashing fuel taxes and spending tens of billions of dollars to help consumers, truckers, farmers and others cope with soaring energy prices exacerbated by Russia’s invasion of Ukraine.
But for those who depend on the fuel for their livelihoods, that’s not enough.
Miguel Angel Rodriguez, one of 200 concrete truck drivers who staged slow-driving protests around Madrid this week, said he used to pay 1,600 euros ($1,760) a month to fill up with gas but has been paying an extra 500 euros since the beginning of the year because of rising diesel prices.
“We are going to continue our strike because in the end, going out to work or staying at home is pretty much the same for us,” said Rodriguez, who warned that rising costs were part of a “domino effect that will ruin us all” unless the government takes some decisive action.
He’s among a growing number of people in industries including trucking and fishing who have protested to pressure politicians to ease their financial pain. The war has exacerbated a months-long energy crisis in Europe, which relies on Russian oil and natural gas. With families and businesses facing crippling energy bills, soaring gasoline prices and other impacts, governments have limited options to provide lasting relief. Volatile energy markets have driven the prices of natural gas and oil, which have soared and sparked record inflation.
Countries such as Italy, the Netherlands, Belgium, Greece, Sweden and Cyprus are doing all they can with temporary measures to provide immediate support, such as deep cuts to fuel taxes, introducing subsidies and discounts for heating and electricity, and capping energy bills for households and small businesses.
The measures are “sensible and some, such as the cuts to energy taxes, could be continued indefinitely even if prices continue to rise,” said Elisabetta Colnago, a senior researcher at the Centre for European Reform, a think tank specializing in EU energy policy.
But she said those were partial solutions that would “only make a marginal difference.”
“The main problem is that these measures to keep energy prices low will also suppress incentives for energy efficiency, investment in green energy generation and electrification of sectors that currently rely on fossil fuels, potentially making the long-term pain of the adjustment even greater,” Colnago said.
Raising interest rates, a tool central banks use to curb inflation, will also do little to curb energy prices, as European Central Bank President Christine Lagarde pointed out last month. “The increase in energy prices is the result of fundamental changes in the energy markets,” Colnago said.
The energy crisis will be high on the agenda at a European Council summit starting in Brussels on Thursday, where the leaders of Spain, Portugal, Italy and Greece are expected to call for an urgent, coordinated Union-wide response. EU officials said Wednesday they wanted U.S. help with a plan to refill natural gas storage facilities for next winter and wanted the bloc to buy gas jointly.
Meanwhile, workers have taken to the streets after gasoline prices across the 27-nation EU rose 40 percent from a year ago to an average of 2.02 euros a litre (equivalent to $8.40 a gallon).
Truck drivers across France, frustrated by what they say is “insufficient” support, organised a day of action on Monday, with groups of private drivers in Normandy and the Channel region setting up blockades to prevent the movement of hundreds of trucks.
Collateral damage included the Paris concert of British hard rock group Royal Blood, which tweeted that it was cancelling its Monday night show because its equipment was stuck at a service station near Paris and “protesters won’t let the truck leave.”
In Cyprus, hundreds of livestock farmers protested outside the presidential palace on Monday, demanding compensation for a sharp rise in animal feed prices due to higher transport costs linked to soaring fuel prices.
Truck drivers in Spain have been disrupting deliveries of fresh food and other goods to supermarkets for more than a week, while farmers paraded tractors through Madrid on Sunday. Outside a government building, cow breeders sprayed milk, arguing that the costs of production are higher than the profits they make from selling it.
As truck driver protests disrupted logistics across the country, Spain’s national fishing federation said its members were unable to even move their catch from ports to inland markets.
“Right now it doesn’t make sense to go out to sea just to lose money,” said Basilio Otero, head of the FNCP guild.
Italian truck drivers and fishing boat owners and crews also held a one-day protest over rising fuel prices.
The measures come even as governments spend billions of dollars to support businesses and households. France announced a multi-billion-euro economic support package last week, including partial subsidies for fuel for fishing boats and trucks for the next four months and 3 billion euros to help some businesses pay soaring gas and electricity bills.
Greece is offering one-off subsidies to taxi drivers and Britain has announced a package of tax cuts and support payments, but they fall far short of what consumer advocates are demanding with utility bills set to rise 54 percent in April due to soaring natural gas prices.
Cypriot authorities have said they will reduce fuel taxes to the “absolute minimum level permitted” under EU regulations for the next six months, a move that will cost the government 30 million euros in lost revenue.
Albania, which normally generates electricity from hydroelectric dams, has been hit by a dry winter that has forced it to rely on imported fossil fuels. To conserve energy, the government has cut power to street lights on some major roads and intersections and told civil servants to work from home for two to three days. The government is paying up to 80 percent of electricity bills for homes and small businesses.
Colnago said there are two options for lowering prices in the long term: investing in renewable energy and measures such as better insulating homes and electrifying industries that rely on natural gas.
In the near future, a common strategic gas reserve proposed by the EU could improve security of supply by next winter.
“But the reality is that replenishing reserves at a time when gas markets are tight will translate into higher prices for everyday consumers,” Colnago said.
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Associated Press writers Elaine Ganley in Paris, Menelaos Hadjikostis in Nicosia, Cyprus, Nicholas Paphitis in Athens, Francis D’Emilio in Rome, Mike Corder in The Hague and Lazar Semini in Tirana, Albania, contributed.
