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The distributional impact of transport fuel price increases following the war in the Middle East

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This policy note provides a first assessment of the distributional impact of transport fuel price surge on EU household incomes following the conflict in Iran. It does so using the latest EUROMOD tax‑benefit microsimulation model and its Consumption Tax extension. Results are based on weekly Member State petrol and diesel price data reported to DG‑ENER (for 26 EU countries, Malta currently excluded due to missing price data). Price changes are measured as the difference between the most recent observation (23. March 2026) and the average pre-conflict price levels between 1. December 2025 and 23. February 2026. The framework isolates the fuel price shock’s incidence across the income distribution and assesses the extent to which recycling additional VAT revenues (e.g., via direct transfers or lower fuel duties) could cushion household impacts.

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  • De Agostini Paola & Trzcinski Kajetan & Klenert David & Weitzel Matthias, 2026. "The distributional impact of transport fuel price increases following the war in the Middle East," JRC Research Reports JRC146449, Joint Research Centre.
    • Handle: RePEc:ipt:iptwpa:jrc146449
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    File URL: https://publications.jrc.ec.europa.eu/repository/handle/JRC146449
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