Five European Union finance ministers are calling for a windfall tax on energy companies due to rising fuel prices caused by the war with Iran, according to a letter from the ministers to the European Commission, Reuters reported on Saturday, writes UNN.
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The finance ministers of Germany, Italy, Spain, Portugal, and Austria made this joint appeal in a letter on Friday, stating that such a measure would signal that "we are united and capable of acting."
"It will also send a clear signal that those who profit from the consequences of war must contribute to easing the burden on the population," they wrote.
Oil and fuel prices have risen sharply since the start of US-Israeli strikes on Iran on February 28, creating a price shock similar to the energy crisis Europe experienced after Russia's invasion of Ukraine in 2022, despite EU countries now getting more energy from renewable sources.
In a letter addressed to EU Climate Commissioner Wopke Hoekstra, the ministers pointed to a similar tax in 2022 to address high energy prices.
"Given current market distortions and fiscal constraints, the European Commission should promptly develop a similar pan-European contribution instrument based on a strong legal framework," they wrote.
The letter did not provide details on the level of windfall tax proposed by the ministers or which companies it should apply to.
The EU's energy commissioner said on Tuesday that a renewal of the energy crisis measures taken in 2022 was being considered, including proposals to reduce electricity tariffs and taxes on electricity.
The EU introduced a series of emergency measures in 2022 after Russia cut gas supplies. These included a pan-European gas price cap, a windfall tax on energy companies, and targets for limiting gas demand.
Europe's strong reliance on imported fuel makes it vulnerable to the impact of the Middle East conflict on global energy prices. Fuel prices in Europe have risen by more than 70% since the start of the US and Israel's war with Iran on February 28.
European Energy Commissioner Dan Jørgensen said that Brussels is particularly concerned in the short term about the supply of petroleum products to Europe, such as aviation fuel and diesel.