Conflict keeping cars off European roads, figures show

Europe's drivers are using less fuel because of shortages and price rises caused by the Middle East tensions, the European Union's statistics agency Eurostat and the United Kingdom's Office for National Statistics, or ONS, have reported.

In its latest tranche of retail sales data, the Eurostat said Europe saw the largest year-on-year fall in fuel sales during April since October 2023, amid fallout from the United States and Israel's attacks on Iran. The conflict has led to the closure of the Strait of Hormuz and massive disruption to global shipments of oil from the Middle East. Prior to the start of the conflict in late February, around a fifth of the world's oil passed through the strait.

Grant Fitzner, chief economist at the ONS, said motorists in April were, as a result, "conserving fuel after stocking up in March". He said retailers had reported that people were making fewer journeys, and were holding off on refueling in the face of fast-rising prices.

Eurostat figures showed six European countries had seen double-digit percentage declines in fuel sales during April, including Austria, Germany, Norway, and the UK, which recorded a 10 percent fall in motor fuel sales after seeing strong sales during March. In April, 12 EU countries recorded diesel prices rising by more than a third compared to a year earlier. Gasoline prices in Europe also went up in April by an average of 13.6 percent year-on-year, according to Eurostat.

The high cost of fuel has not only had an impact on Europe's roads, but it has also increased inflation to 3.2 percent in May.

Ugne Keliauskaite, a research analyst at the Bruegel economic think tank in Brussels, told the Financial Times newspaper the situation could worsen if the Iran war drags on and oil prices rise further.

"When storage levels for certain products continue to melt, prices could increase further," Keliauskaite said. "Governments that have already deployed their fiscal and energy reserves to lower today's prices will have little left to respond, if conditions worsen." Some governments have tried to ease the pain by cutting taxes on fuel, including Germany, Ireland, Italy, and Spain.

And the fuel shortages and price rises are also having a massive impact on Europe's vacation industry, with a Deloitte survey of 21 global airline CEOs finding that fuel-price volatility and inflation are now at the top of the industry's risk agenda.

"Together, they've turned what was supposed to be a record year into a fight for margin," the survey's summary said.