In April 2022, fuel prices across the world surged to unprecedented levels, driven by the US-Israeli war on Iran and the resulting supply shock from the Middle East [3]. The International Energy Agency said the disruption was greater than the 1970s OPEC oil embargo [3]. Governments responded with an array of emergency measures: tax cuts, price caps, subsidies, and demand reduction.
Europe
In Germany, diesel prices rose above €2.43 per liter on average across the 100 largest cities, while Super E10 gasoline cost more than €2.18 per liter [1][2]. The government reduced the fuel tax by €0.17, expecting a tax shortfall of €1.6 billion [4]. Employers were encouraged to pay a one-time, tax- and duty-free relief bonus of €1,000 in 2022 [5].
Ireland approved a package worth half a billion euros, including a heating subsidy for 500,000 low-income households and a waiver of taxes on diesel and gasoline until the end of May [6].
Turkey has had a sliding-scale fuel tax since 2018 that decreases as prices rise [7]. Finance Minister Mehmet Simsek warned that the system is only financially sustainable temporarily, not if market prices remain high for an extended period [8].
Asia-Pacific
The Philippines sources well over 90% of its oil from the Gulf region [9]. Diesel and gasoline prices have doubled since February [10]. The government suspended the tax on liquefied petroleum gas, making a standard 11-kilogram cylinder about €0.50 cheaper [11].
Japan allocated more than €4 billion to keep the average gasoline price at about €0.91 per liter [12]. South Korea set a price cap equivalent to about €1.19 per liter of fuel in March, then raised it by €0.14 shortly after [13]. The government estimates it will cost around €3 billion to compensate refineries and wholesalers for losses from the price cap [14]. It plans to allocate another €3 billion to support middle- and low-income households up to €350 per person [15].
Fuel prices in China are about 30% higher than two months ago [16]. India lowered its fuel tax by €0.09 per liter, accounting for about 10% of the price [17]. It also raised export taxes on diesel and jet fuel to keep more fuel in the country [18].
Pakistan instructed employers to have 50% of office workers work from home, civil servants work four days a week, and government agencies cut fuel use by 50% for two months [19].
Africa
Kenya introduced higher price caps on April 14 alongside a three-percentage-point reduction in VAT [20]. Gasoline now costs about 16% more, and diesel 24% more, both at around €1.36 per liter [21].
South Africa sets fuel prices monthly based on a formula including world market prices and exchange rates [22]. Since February, gasoline prices have risen by about 20%, diesel by 40% [23]. The government lowered the fuel tax by about €0.16 per liter for April, making gasoline cost €1.27 per liter and diesel €1.35 [24].
Ghana's NPA raised the recommended price for gasoline by 27% to €1.02 per liter and diesel by nearly 50% to €1.32 since the end of February [25].
Americas
Mexico reached an informal agreement with most gas station operators on a price cap of around €1.18 per liter for gasoline and €1.37 for diesel [26]. Approximately €250 million per week flows to the oil sector via the energy tax [27]. President Claudia Sheinbaum stated that without these measures, prices would be up to 25% higher [28].
Argentina agreed with YPF to keep fuel prices stable for 45 days after a 15% rise [29].
In the US, gasoline prices increased by 35% since late February [30]. Indiana suspended the gas tax, making drivers pay €0.04 less per liter [31].
What to watch next
The sustainability of these measures depends on how long the war and supply disruption last. Countries with sliding-scale taxes or price caps face growing fiscal strain. If prices remain elevated, more governments may turn to demand reduction measures like Pakistan's work-from-home orders, potentially reshaping fuel consumption patterns for months to come.