Six European Union countries are advocating for a discussion in September regarding a tax mechanism aimed at addressing the extraordinary profits generated by oil companies due to Iran’s blockade of the Strait of Hormuz. This initiative was revealed in a letter from their finance ministers made public on Monday, according to Reuters.
The letter, addressed to Ireland, which currently holds the EU’s rotating presidency, comes from Germany, Spain, Portugal, Italy, Poland, and Austria. The ministers are requesting that this matter be included on the agenda for the upcoming meeting of EU finance ministers scheduled to take place in Dublin on September 18-19.
“We are facing one of the largest supply shocks in decades, and there is growing global dissatisfaction with rising living costs,” the finance ministers stated in their letter.
“Those Who Profit Must Contribute”
They further expressed that the governmental measures taken thus far have not been sufficient to permanently reduce or stabilize prices for businesses and citizens. Therefore, they emphasized the need for a collective approach that ensures those benefiting from the crisis contribute to alleviating the burdens faced by the general public.
Since the outbreak of the conflict between the U.S. and Israel against Iran on February 28, oil prices have surged by approximately 25%. Additionally, refined product prices have seen even greater increases, with diesel prices in Europe climbing over 70% since the beginning of the conflict, while gasoline prices have risen by about 20%.
The letter also highlighted the necessity to address high energy prices by discussing a framework at the EU level for taxing exceptional profits. It called for a more specific analysis of how profits realized abroad by multinational oil companies could be more accurately included in such taxation, taking into account the lessons learned in 2022.
Moreover, the ministers expressed their desire to see the results of a European investigation into refinery margins as soon as possible, ensuring that these companies do not exploit the current surge in energy prices.
