Oil and gas prices soar, EU considers imposing windfall tax on energy companies.

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The Iran war has led to a rise in oil and gas prices, and EU countries are considering whether to tax the profits of energy companies.

After a meeting held in Brussels on Friday, EU economic chief Valdis Dombrovskis stated that finance ministers from some eurozone countries proposed possibly responding to the price increases with a "windfall profits tax." According to media reports citing informed sources, Germany and Austria support this measure, and the European Commission said it would assess its feasibility in the meeting. The Austrian and German governments did not immediately respond to requests for comment.

Currently, the Strait of Hormuz is effectively closed, causing oil and gas prices to surge. Dombrovskis warned that this price increase could trigger a "stagflation shock."

The EU agreed in 2022 to implement a temporary tax measure, known as the "solidarity contribution," to tax the abnormal profits of some energy companies. At that time, the Russia-Ukraine conflict had triggered a similar spike in energy prices.

Dombrovskis referred on Friday to the measures taken in response to the Russia-Ukraine conflict as a precedent for current policy. He also stated that the European Commission would recommend that countries lower electricity tax rates and ensure that the tax burden on electricity remains below that of fossil fuels, in order to optimize the energy tax structure.

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