Six European Union governments are pushing for a formal debate next month about an EU-wide approach to taxing extraordinary profits earned by oil companies as a result of disruptions linked to Iran's blockade of the Strait of Hormuz.
In a written appeal addressed to Ireland, which currently holds the EU rotating presidency, the finance ministers of Germany, Spain, Portugal, Italy, Poland and Austria requested that the matter be placed on the agenda for the EU finance ministers' meeting scheduled in Dublin on September 18 to 19. The letter argues that the current disruption amounts to a significant supply shock and that existing national measures have not been adequate to contain or stabilise energy prices.
The ministers framed the request around the social and economic consequences of the recent price moves, noting growing public discontent over higher costs of living. They contend that a coordinated response is necessary to ensure that firms benefiting from the market dislocation contribute to alleviating the burden on households and businesses.
"We are experiencing one of the biggest supply shocks in decades, and all over the world there is growing discontent about the rise in the cost of living," the ministers wrote. "Government measures taken so far have not been sufficient to reduce or stabilise prices for businesses and citizens on a permanent basis. This is why we need a common approach, one that ensures that those who are profiting from the crisis do their part to ease the burden on the general public."
The letter points specifically to renewed consideration of a framework to tax windfall profits, drawing on experience from 2022 but seeking a more targeted design this time. It calls for a "more specific analysis of how the foreign profits of multinational oil companies can be included in a more targeted way," indicating an intent to address profits earned outside home jurisdictions as part of any EU instrument.
Ministers backing the move also asked for the prompt release of findings from a European investigation into refiners' margins. The stated aim is to verify whether refineries are taking undue advantage of the energy price surge.
The appeal arrives against a backdrop of pronounced price increases: oil prices have climbed roughly 25% compared with levels at the outbreak of the U.S.-Israeli war on Iran on February 28, while refined fuels have seen even larger moves. European diesel prices have risen by more than 70% since that point, and gasoline prices have advanced by around 20%.
The request from the six governments seeks collective EU consideration of taxation options as part of a broader effort to address the economic impact of the supply shock and to ensure market participants perceived to be profiting from the situation contribute to easing the strain on consumers and businesses.