Iran situation exacerbates energy worries, EU to introduce new policy on reducing fees and taxes.

According to reports, the European Commission plans to propose lowering energy taxes and grid fees to promote the dissemination of clean energy technologies, while mitigating the impact of soaring oil and gas prices. According to informed sources, the European Commission will outline measures aimed at mitigating the impact of rising fuel prices on businesses and consumers in a policy document to be passed on April 22nd. The closure of the Strait of Hormuz during the Iran war has heightened concerns about persistently high energy prices. While the EU's dependence on energy supplies from the Middle East is limited, its heavy reliance on fossil fuel imports makes it susceptible to global price shocks. Following US President Trump's announcement of a blockade of the Strait of Hormuz, European benchmark natural gas prices rose by 8.5% on Monday, 48% higher than before the conflict. Brent crude oil prices have surged by 41% since the outbreak of the war. Concerns about the EU's declining competitiveness have made energy pricing a top priority on the EU's political agenda. However, the European Commission's room for action is limited, especially since most member states are pursuing domestic solutions tailored to their political and economic needs. The Commission's policy toolbox is not aimed at pushing for radical reforms, but rather at ensuring coordinated measures to avoid inflation and budget deficits, while ensuring that the region continues to reduce its dependence on fossil fuels. A report from the Jacques Delors Institute shows that since the outbreak of the Iran war, the 22 EU member states have introduced over 120 independent measures costing over 9 billion euros (10.5 billion US dollars) to mitigate the impact of rising energy prices. Additionally, due to the increase in import prices for fossil fuels, an additional 13 billion euros in costs have been incurred. European Commission President Ursula von der Leyen stated last month that any short-term measures must be temporary and targeted, and that the EU needs to quickly address the structural factors contributing to high energy prices, particularly in the electricity sector. Informed sources reveal that the European Commission will propose measures to improve the efficiency of the electricity grid infrastructure and lower grid fees next week. The European Commission is also expected to propose measures to reduce electricity taxes, eliminate certain tax items, and ensure that the tax treatment of electricity is more favorable than that of fossil fuels. The recommendations in next week's document regarding energy efficiency and support for clean technologies will build on the plan put forward by the European Commission in 2022. At that time, a reduction in Russian gas supply led to historically high natural gas prices. Informed sources reveal that the European Commission will not propose any demand reduction targets similar to those discussed four years ago. There is also no likelihood of implementing a price cap on natural gas. During the 2022 crisis, the EU proposed setting a benchmark price cap at 180 euros per megawatt-hour, but this cap was never enforced. Informed sources suggest that the plan next week may include some guidelines on windfall taxes, but due to differences among member states, the plan will not suggest this as a common EU-wide measure. Last week, finance ministers from Germany, Italy, Spain, Austria, and Portugal called for windfall taxes on energy companies profiting from the war.