Europe faces energy crisis as fuel prices rise and refining capacity declines

Europe is facing a significant energy crisis driven by a shortage of refining capacity and geopolitical instability in the Middle East. The continent's transition toward decarbonization has led to the closure of one in five refineries, leaving the region vulnerable to supply disruptions and high costs for refined products like diesel and gasoline.

In France, gasoline prices have exceeded 2.17 euros, while diesel in Germany has reached 2.47 euros. These rising costs are also impacting Greece.

In Cyprus, Finance Minister Makis Keravnos stated that the government's primary goal is to stabilize fuel prices rather than achieve major reductions due to the global energy crisis. Keravnos noted that Cyprus is positioned near four active conflicts, contributing to global energy volatility. He announced plans to seek greater flexibility in applying EU fiscal rules to better address the crisis and mentioned that the government has already reduced tax rates to the minimum allowed under the European framework.