For now, oil prices have settled back to around $100 a barrel. Gas prices in Europe are about 50 percent higher than pre-war levels, but electricity prices, the bread and butter of the global economy, are roughly the same as they were last year.\u00a0<\/p>\n
Why? Long story short: many people in the global south have stopped using oil, some Gulf supply now reaches global markets through pipelines crossing the Arabian desert; and wealthy countries, most importantly<\/a> China, are drawing down reserves fast.\u00a0<\/p>\n But bank analysts warn the relatively stable prices will not last. Likewise, the European Commission in May warned<\/a> that a downside scenario where oil reaches global recession levels of $180 a barrel plus, remained very much in play.\u00a0\u00a0<\/p>\n The question is how are European countries responding? Back in March, EUobserver reviewed<\/a> the emergency measures taken in the six largest EU economies. <\/p>\n In a March\u00a0communique<\/a>, the commission called on countries to \u201cnot unduly increase demand for gas and oil\u201d with untargeted fuel subsidies. We found that Spain, Italy and Poland did do exactly that, while Germany and France were more reluctant to act.<\/p>\n Today, the picture has changed.\u00a0At next week\u2019s summit of European leaders in Brussels, the energy crisis will barely feature on the agenda. And some member states have already started to unwind crisis measures.\u00a0<\/p>\n Here is where the biggest economies now stand.\u00a0<\/p>\n Germany \u2014 untargeted fuel tax cuts and retreat from green policy<\/strong><\/p>\n Germany\u2019s initial response to the crisis back in March stood out for its restraint. No subsidies, just a one-price increase per day rule for fuel stations, and tightening of competition law, which allowed federal officers to intervene more easily in cases of \u2018excessive\u2019 pricing.<\/p>\n That changed in April when the Bundestag cut petrol and diesel taxes by 17 cents per litre (including VAT) until the end of June, at a projected cost of around \u20ac1.6bn.\u00a0<\/p>\n The package also lets employers give workers a one-off \u20ac1,000 tax-free payment to help with living costs. A proposal from the Greens to slash the household electricity tax from 2.05 cents to the EU minimum of 0.1 cents per kWh was, however, rejected.<\/p>\n What comes after 30 June when these policies end is still unclear.\u00a0<\/p>\n Some politicians<\/a> want the measures extended. But transport minister Patrick Schnieder poured cold water on that idea, telling<\/a> Handelsblatt at the end of May that the state \u201cwas reaching the limits\u201d of what it can do.\u00a0<\/p>\n He also ruled out fuel-saving measures such as speed limits or car-free Sundays.<\/p>\n Germany\u2019s emergency package included nothing to accelerate electrification or decarbonisation.<\/p>\n And in some respects policies favour fossil fuels. In May, the government scrapped plans for a mandatory gas boiler phase-out, giving households more flexibility on heating but potentially cementing gas dependency for years to come.<\/p>\n![\"\"](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2026\/05\/acac336ebe6dcf2578bef7ee4fd02060-600x369.jpg\")
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German petrol and gas prices three weeks after the US-Israel bombing of Iran (Source: Wikimedia<\/a>)<\/p>\n
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