Refinery margins on diesel are at a record high in Europe. Slovakia is capping petrol-station prices, while Czechia and Poland want to tax refineries

European low-sulphur gasoil, the main price benchmark for the diesel market, reached a premium of approximately $95 per barrel over Brent crude on Wednesday. This is a record level, and economists interpret it as meaning that a decisive share of the price is now being formed at the refinery rather than at the petrol station. Nevertheless, from October the Slovak government will cap retailers’ margins at ten cents per litre and has rejected a special levy on the refinery, while Czechia and Poland are attempting to tax their profits. On Thursday, two figures were added that underline the difference. The average price of diesel at petrol stations in the EU rose to a historic record of €2.23 per litre, and the European Central Bank identified refinery margins as one source of inflation. BFMTV ↗ ANSA ↗ In the afternoon, the European Commission spoke out: in its view, Trump’s contemplated ban on US diesel exports would harm both sides. Commerzbank estimates that diesel in Europe would become 20 to 25 percent more expensive. HRT ↗ Tagesspiegel ↗ Overnight into Friday, the French president joined the debate. In a television interview, Emmanuel Macron rejected tax cuts as the “most virtuous” solution, but did not rule them out if prices rose further, and announced the deployment of military assets to protect the Saudi oil port of Yanbu. In Britain, meanwhile, they calculated the cost of scrapping their own windfall tax on oil companies early.

The record is being created at the refinery, not at the pump

The premium of European low-sulphur gasoil over North Sea Brent crude jumped to around $95 per barrel on Wednesday morning. The rise in margins reflects the tense situation caused by conflicts in the Middle East and Ukraine and fears of further supply restrictions, now also from the United States. Respekt ↗

The latest risk came from there. On Tuesday, US President Donald Trump supported the idea of banning diesel exports in order to make fuel cheaper on the domestic market, while the administration is still examining whether such a step is feasible. Seznam Zprávy ↗ Europe is heavily dependent on imports of US diesel and jet fuel, because after being cut off from Russian supplies it lacks a replacement. CNBC ↗

On Thursday, the European Commission warned that any disruption of energy cooperation with the US “could negatively affect both sides”, as its spokesman Olof Gill put it; according to Le Figaro, Brussels also described it as a “very bad idea”. Energy spokeswoman Ana Kaisa Itkonen also said that there is still enough diesel in the EU and that high-level talks with Washington are under way. According to media reports, the administration is preparing a 90-day ban intended to lower fuel prices before the November elections, but US producers oppose it. Commerzbank chief economist Jörg Krämer calculates that a ban would raise diesel prices in Europe by 20 to 25 percent and increase eurozone inflation by around half a percentage point. He considers the ban itself rather unlikely, as it would hit the profits of the US oil industry. HRT ↗ Le Figaro ↗ Tagesspiegel ↗

Pavel Peterka, chief economist at XTB, also points to the refinery as the decisive link in the chain. “These problems are primarily caused by refinery margins and higher oil prices,” he told Radiožurnál. iROZHLAS ↗

The European Central Bank reached a similar conclusion on Thursday. In its economic bulletin, it writes that energy-price inflation accelerated to 14.3 percent in August from 10.3 percent in July, with refinery margins on liquid fuels contributing substantially. It also shows how the shock is divided between wages and profits. Labour costs per employee rose 3.3 percent year on year in the second quarter, slower than in the first quarter, when the increase was 3.5 percent, while growth in profits per unit of output accelerated from 0.3 to 2.2 percent. According to the ECB, overall inflation will probably remain significantly above the two-percent target until the first half of 2027. ANSA ↗ The profit figure concerns the entire eurozone economy, not just fuel companies, so it says nothing about the margins of any particular refinery.

The effect is directly visible at the pumps. According to the European Commission’s weekly Oil Bulletin, processed by AFP, the average price of diesel in the EU rose in one week from €2.16 to €2.23 per litre, the highest since these measurements began in 2005. A record was set in nineteen countries, including Germany, France and Italy. Diesel is most expensive in Denmark and Finland, at €2.56, while in Germany it costs €2.46. BFMTV ↗

What happens when the measure ends

Poland offers the region’s most recent experience. Its government had a package called Ceny Paliwa Niżej, which cut VAT on fuel from 23 to 8 percent and introduced maximum prices; its second edition ran from 17 to 31 August.

The return of the 23-percent tax took effect almost immediately. The average price of Pb95 petrol, according to the e-petrol portal, rose from 6.57 to 7.63 zlotys per litre, while diesel rose from 7.51 to 8.39 zlotys. By 16 September, Pb95 was selling for an average of 7.98 zlotys and diesel for 8.89 zlotys, the highest price in the portal’s history of measurements. Bankier.pl ↗

A similar jump occurred in Czechia after the previous regulation ended there in July. Diesel became 14.3 percent more expensive month on month in August, the largest increase of all EU countries, Eurostat data showed; the EU-wide average was 8.3 percent. Petrol in Czechia rose by only 2.7 percent, less than the EU average of 3.3 percent. iROZHLAS ↗ Analysts attribute the difference to a combination of tax changes, the end of regulation and rising prices on the European wholesale market. Ekonomický deník ↗

For Slovak drivers, this has one concrete implication. The train discount applies only during October, and Czech price caps likewise run only until 31 October, so in both cases the date when the buffer disappears is known in advance.

Neighbours are targeting refineries, Slovakia is targeting retailers

Slovakia is restricting the final link in the chain. On Wednesday, Prime Minister Robert Fico announced a maximum retail margin of ten cents per litre from October, a halving of second-class train fares during October, and talks with higher territorial units and regional capitals about cutting bus and public-transport fares by thirty percent. He is leaving the final fuel price to the market. At Slovnaft petrol stations, diesel was just below €2 on Wednesday morning, while petrol was selling above €1.85 per litre. SME ↗

Czechia is intervening in two places at once. From 1 to 31 October, the finance ministry will set the maximum price of petrol and diesel each day as the sum of a three-day moving average of four reference sources and a regulated margin of 2.50 korunas per litre, while excise duty on diesel will fall from 9.95 to 8.011 korunas. Ministerstvo financí ČR ↗ At the same time, the Czech government approved a proposal for an extraordinary tax on the refining sector equal to fifty percent of the increase in gross margin compared with 2025, for 2026 and 2027, with estimated revenue of about 5.5 billion korunas this year. It would apply to companies with total revenues of at least two billion korunas and refining revenues of at least fifty million, effectively one taxpayer, and the law still has to pass through parliament. Ministerstvo financí ČR ↗

Poland is attempting to tax refineries for the second time. In July, President Karol Nawrocki sent the first version of the windfall-profit law for fuel companies to Poland’s Constitutional Court over suspected retroactivity, so the Sejm approved it again and the proposal is now heading to the Senate. The tax should apply to the period from March 2026 to March 2027. Money.pl ↗

Hungary chose a third path. The government abolished the official “protected price” for fuel at the end of June Portfolio.hu ↗ and refuses to restore it, arguing that it would cost tens of billions of forints a month. Instead, it provides a targeted subsidy. Prime Minister Péter Magyar announced 20,000 forints per person, paid in monthly instalments of 5,000 from September to December, for owners of diesel cars with engines up to 110 kilowatts, or approximately 150 horsepower. It concerns nearly one million people; the tax authority assesses eligibility automatically, and the state refunds farmers’ diesel excise duty. Portfolio.hu ↗

Government rejects refinery levy, opposition demands it

Slovnaft is both a refinery and the dominant fuel retailer in Slovakia, so the question of whether it should contribute to the measure has become the most contentious point of the entire package. Prime Minister Fico rejected the levy, saying that a similar instrument already exists. “In Slovakia, we cannot introduce another special levy on refineries because we already have one,” he said, referring to the sectoral tax. He also confirmed that Slovnaft representatives were present at the government meeting and repeated his demand that Slovakia remain among the cheaper half of EU countries. TASR ↗

The opposition sees it differently, although it does not agree on the instrument. Progressive Slovakia MP Ján Hargaš calls for additional taxation of Slovnaft and for the proceeds to be used for fuel vouchers for vulnerable households. Rastislav Krátky of KDH pointed out that a Slovnaft representative sat at the government meeting, but the refinery left without any obligation to take part in the solution. Veronika Remišová of the Slovakia Movement summed it up by saying that “Fico tells petrol-station operators what margin they may have, but refuses to tax Slovnaft’s windfall profits”. TA3 ↗ Freedom and Solidarity advocates another route: cutting excise duty, the measure adopted by Czechia. Trend ↗

What the margin cap will actually bring remains open. Radovan Potočár, analyst and editor-in-chief of Energie-portal.sk, warns that a ten-cent limit does not promise that every litre will become ten cents cheaper, because the final price will still be determined by input-cost developments. Energie-portal.sk ↗

The differences between the models are not merely technical, because they differ in who bears the cost. In Slovakia, according to a commentary by Iris Kopcsayová in Pravda, the cost of the fuel measure is borne mainly by the retailer, whose restricted margin is not compensated by the state, while for discounted fares the state will have to reimburse the carrier for lost revenue. In Czechia, retailers and the state share the cost; in Poland, lower taxes meant that the state bore most of the burden. Pravda ↗

The same dispute over who should pay for the crisis opened in Britain overnight into Friday. The government wants to replace the windfall tax on oil and gas companies, known as the energy profits levy, with a new levy on oil and gas revenues from 2030, but industry is pressing for an earlier start. According to an analysis for Global Witness, at an oil price of around $100 per barrel the new regime would raise £8.6 billion less by 2030 than the current tax; if oil fell to $70, it would raise nothing, while the current tax would bring in £4.6 billion. Offshore Energies UK, by contrast, says that an earlier transition combined with a “more pragmatic” approach to licensing would unlock 111 projects in the UK section of the continental shelf. Global Witness, Greenpeace UK, the End Fuel Poverty coalition and other organisations wrote to Chancellor John Healey urging him to resist calls for an earlier repeal of the tax, referring to companies that had “profited” from the Middle East crisis. The Independent ↗

Beyond the V4, drought and supply are adding to the price

Outside the region, expensive fuel has also become a political issue in France. The government is turning to subsidies: from 1 October, employers may reimburse employees for fuel free of social contributions and income tax up to €1,000 a year, compared with a ceiling of €600 in June, and it has extended and expanded support for those who drive the most. RMC ↗ Ségolène Royal, who is seeking the Socialist primary nomination, also called TotalEnergies’ margins a form of speculation. Le Figaro ↗

President Emmanuel Macron then gave a 40-minute interview to TF1 and France 2 on Thursday evening, his first such interview since 2024. He identified events in the Strait of Hormuz as the main cause of rising prices and announced that France would send personnel, radars and air-defence systems to protect the Saudi oil terminal at Yanbu. “Not to take part in any conflict, but to protect the site,” he said. He called cutting fuel taxes a solution that “is not the most virtuous”, because taxes “serve to finance government spending”, and described targeted assistance for those who need it most as more sensible. He added that “we will not let prices shoot up” and that “depending on how things develop, nothing should be ruled out”. He called Trump’s contemplated ban on US diesel exports a bad decision “not only for the rest of the world, but also for the American economy”. 20 Minutes ↗ Le Figaro ↗ Former prime minister Dominique de Villepin called that same evening for an “absolute cap of €2.50 per litre” BFM TV ↗, while the Valenciennois metropolitan area introduced free public transport for three months. BFM TV ↗

Moldova went furthest. On Tuesday, parliament approved by 54 votes to 20 a 60-day state of emergency in the energy and water sectors, beginning on Saturday 26 September and allowing the authorities to respond quickly to disruptions in energy, fuel and water supplies. Prime Minister Vasile Tofan described the combination of war in the Middle East, the war in Ukraine and unprecedented drought as a “perfect storm” affecting a country of 2.4 million people. According to AFP, drought has lowered river levels across Europe, further worsening energy supplies. TV Markíza ↗

Moldovan Energy Minister Dorin Junghietu admitted that the price of diesel could reach and exceed forty lei per litre, equivalent to roughly €2. NewsMaker ↗

On Thursday, more countries turned to taxes. Latvia’s parliament approved a lower excise duty from 1 October: for diesel, from €396 to €330 per thousand litres, and for petrol to €490, which, if fully passed on, will cut the price by about eight cents per litre. The three-month shortfall of €14.4 million will be covered by selling assets confiscated from criminals. In neighbouring Lithuania, Gediminas Šimkus proposes automatically lowering excise duty when prices exceed a set threshold, and Virginijus Sinkevičius wants to convene a coalition council next week over fuel prices. In Portugal, Economy Minister Manuel Castro Almeida urged people to save fuel wherever possible and rejected further support that would disrupt the balanced budget. The civil pilots’ union reports a shortage of aviation fuel which, it says, is raising ticket prices by 15 to 20 percent and forcing some flights to be rescheduled, while Socialist leader José Luís Carneiro is asking the government to explain whether there are problems with strategic reserves. In Norway, where a litre of diesel has exceeded 30 kroner, 99 mayors from seven parties signed a call to restore a temporary cut in fuel taxes. LRT ↗ LRT ↗ RTP ↗ Jornal de Negócios ↗ RTP ↗ RTP ↗ Aftenposten ↗

Lithuania has added another proposal to the tax debate. On Thursday, diesel cost €2.40 at some petrol stations and petrol €2.09, while another price increase has been programmed from January because of the rising carbon component: ten cents for diesel and three for petrol. Virginijus Sinkevičius, chairman of the Democratic Union “Vardan Lietuvos”, therefore proposes temporarily postponing this component and seeking agreement on it in the Union. “We can see now that fuel prices are already high. They will rise further from the New Year. There is talk of more expensive heating, and all of this undoubtedly creates tension in society,” he said. The coalition partners of the governing Social Democrats are also calling for the Latvian example to be followed, and the government’s proposal for train and bus tickets at half price is not enough for them: according to Aurelijus Veryga, chairman of the Union of Peasants and Greens, people in the regions have no alternative to the car. LRT ↗

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