A dereliction of fuel duty: Europe’s €9 billion gift to Putin and the rich

Mar 22, 2022
  • Description

Russia's invasion of Ukraine has pushed fuel prices to recent highs. To appease drivers at the pump, half of EU Member States (14 of 27 – see our Fuel Duty Tracker) have reacted by cutting fuel taxes. This study analyses the cost of these measures to public finances and explores other ways to raise revenue and help low-income families through the energy crisis.

While this policy approach has a simplistic appeal, it also generates perverse environmental incentives and inequitable social outcomes as the rich use eight times more fuel than the poor and oil companies will adjust their prices to take a share of the tax cut.