4 Measures EU Governments Can Deploy Now to Defend Drivers from the Oil Value Shock

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4 demand-side measures might save EU automobile drivers €30–74 billion per 12 months.

The shock on the pump

The US-Israel battle on Iran has despatched oil costs to ranges not seen for the reason that 2022 power disaster. With the Strait of Hormuz presently blocked — by way of which roughly 20% of world oil commerce flows — markets are pricing in a sustained interval of elevated costs. European drivers are already feeling the implications. By mid-April, filling a 55-litre diesel tank price nearly €30 greater than earlier than the battle started.

This isn’t merely a short-term spike. It’s a reminder of Europe’s deep and expensive dependence on imported oil for highway transport. With the transition to electrical autos nonetheless in progress, thousands and thousands of households stay uncovered to the total volatility of world oil markets.

However this isn’t inevitable — and the response mustn’t fall on particular person drivers alone. The IEA has recognized a set of sensible, low-cost behavioural and coverage measures that governments can implement instantly to scale back gasoline consumption and the family payments that include it. T&E has quantified what these measures would imply in euros for EU automobile drivers.

These measures can ease the speedy burden — however they aren’t a structural repair. Solely the transition to electrical autos, which completely removes drivers from oil market publicity, provides lasting safety from the following disaster. Within the meantime, demand-side measures symbolize the quickest accessible coverage response, and governments ought to act on them now.

Why this issues now

The US-Iran battle has uncovered the fragility of a transport system nonetheless overwhelmingly depending on fossil fuels. Whereas the long-term reply is electrification — which completely insulates drivers from oil value volatility — that transition will take years to finish. Within the meantime, demand-side measures supply the quickest accessible safety. Crucially, these aren’t measures that require main capital expenditure or lengthy lead occasions. Three extra days of distant working per week, decrease velocity limits on motorways, or just checking tyre strain will be facilitated instantly by governments. In a political setting more and more targeted on the price of dwelling and power safety, these measures deserve consideration. The oil value shock is occurring now. The financial savings can start instantly.

4 measures, actual financial savings

The IEA’s 10-point plan for decreasing oil demand in transport identifies 5 measures relevant to EU automobile drivers, 4 of which T&E assesses to be viable brief time period measures. T&E has translated every of those 4 measures into the corresponding annual shopper price saving.

It must be famous that on the idea of fairness we have now excluded the IEA measure on alternate non-public automobile entry to roads in massive cities on totally different days. Additional, the IEA measure on eco-driving (tyre pressures and air con use) could also be overstated, as drivers are more likely to shortly revert to earlier driving types.

What policymakers ought to do now

1. Encourage versatile working preparations the place possible. Three extra distant working days per week might cut back particular person driver gasoline payments by as much as 20%.
2. Reinstate or strengthen motorway velocity restrict enforcement, with a minimal 10 km/h discount on key corridors, as per the IEA emergency advice.
3. Speed up funding in public transport as an emergency power safety measure.
4. Situation clear public steerage on eco-driving, tyre strain upkeep and car-sharing to accompany any emergency communications on gasoline costs.
5. Pursue these short-term measures alongside the long-term structural answer: accelerated EV adoption, which completely removes drivers from oil market publicity.

Briefing from T&E.