EU plans more fuel subsidies to tackle Iran war price spikes

The European Commission wants to let countries unleash more public money to help businesses with fuel and fertiliser bills, ​it said on Monday, as governments race to offset the ‌economic shock from soaring prices triggered by the Iran war.

Oil prices jumped about 6% to more than $100 a barrel on Monday after the U.S. military ​said it will blockade ships leaving Iran's ports, raising fears ​of prolonged disruptions to oil and gas shipments, News.Az reports, citing Reuters.

As part ⁠of a broader package of measures Brussels is preparing to respond ​to the energy price spike, the Commission on Monday proposed changing ​EU state aid rules to allow more public spending for industries hit acutely by fuel price increases, including agriculture, road transport and shipping within Europe.

The changes ​would let governments cover part of the price increase companies have ​paid for their fuel or fertilisers, versus prices before the U.S.-Israeli war with ‌Iran ⁠began on February 28.

The draft EU plan would also increase, to above 50%, the maximum share of aid that energy-intensive industries can receive to help pay their power bills.

European governments including Germany, Italy, Poland ​and Hungary have already ​introduced a ⁠raft of funding measures including fuel price caps and tax cuts, to try to contain the Iran ​war's economic fallout.

Governments will give feedback on the ​EU proposals, ⁠before the Commission plans to adopt a final version by the end of the month.

The proposed changes would be temporary, introduced specifically to ⁠address ​the energy fallout of the Iran war.
The ​Commission vets national governments' state aid to check that it does not distort competition ​in the EU single market.

News.Az 

By Faig Mahmudov