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Diesel Has Become Europe’s Most Expensive Fuel — And The Tax Gap With Petrol Still Stands

by THEFUTURE.TEAM

Diesel is now the most expensive fuel at Europe’s pumps, underscoring how geopolitics, refining constraints and tax policy are converging to hit drivers and businesses at the same time.

Diesel Reaches A Record High Across The EU

The EU-weighted average price of diesel climbed to €2.226 per litre on 21 September 2026, according to the European Commission’s Weekly Oil Bulletin. That is the highest level since the data series began in 2005.

At that price, diesel cost 13.4 cents more per litre than Euro-super 95 petrol. Filling a 50-litre tank now costs roughly €111, with close to 40% of the bill going to taxes.

Across the bloc, diesel taxes averaged €0.861 per litre, or 38.6% of the pump price. Petrol carries an even heavier tax burden in absolute terms at €0.981 per litre, but diesel’s higher pre-tax cost has now pushed it ahead at the pump.

War, Supply Routes And Refining Margins Are Driving The Spike

The conflict with Iran, which began in February, has disrupted energy flows through the Strait of Hormuz, tightening supply and hitting diesel harder than petrol. Since late February, the EU average diesel price has risen by about 40%.

European Central Bank experts estimate that refining margins added €0.41 per litre to diesel in the third week of September, equal to 19% of what drivers pay. According to the ECB, prices are unlikely to ease materially without “a cessation of the war in the Middle East, a normalisation of flows through the Strait of Hormuz and a restoration of global refining activity.”

Why Diesel Still Enjoys A Tax Advantage Over Petrol

Diesel’s lighter tax treatment is not new. EU rules set a minimum excise duty of €0.33 per litre on diesel, compared with €0.359 on petrol.

Most governments preserve an even wider gap in their own tax rates, a policy long defended as support for hauliers, farmers and other diesel-dependent sectors.

In 2015, Brussels-based campaign group Transport & Environment calculated that Europeans paid an average of 14 cents more tax per litre on petrol than on diesel. A decade later, the differential remains largely intact.

A 2021 European Commission proposal to tax fuels by energy content rather than by volume would have removed diesel’s advantage. But the measure requires unanimous approval from all 27 member states, and a compromise text failed to secure support in November 2025.

How Diesel Taxes Are Calculated

Diesel is taxed in two stages. First comes excise duty, a fixed amount per litre. Some countries also add levies such as carbon charges. Value-added tax is then applied on top of the total, meaning VAT is charged on both the fuel and the excise. In effect, it is a tax on a tax.

The ranking below compares the amount of tax paid per litre, not the share of the pump price that goes to tax.

Europe’s 10 Highest Diesel Tax Burdens

10. Greece: €0.855 per litre
Greece charges €0.41 per litre in excise, unchanged since July 2017, plus 24% VAT. Including other taxes of about €0.014 per litre, taxes account for 38.4% of the €2.224 pump price. Petrol is taxed even more heavily, with Greek diesel carrying a 28.6-cent-per-litre tax advantage, the widest gap in the EU.

9. Austria: €0.897 per litre
Austria combines a mineral oil tax of €0.378 per litre with a carbon levy of about €0.145, before applying 20% VAT. Taxes account for 40.1% of the €2.238 pump price.

8. Lithuania: €0.945 per litre
Lithuania charges a fixed diesel excise duty of €0.50 per litre, higher than the fixed duty on petrol, plus a CO₂ component of €0.0536. It then applies 21% VAT. A temporary cut in the fixed excise component to €0.45 per litre, approved in April in response to the Middle East conflict, ended on 15 June. Taxes account for 41.9% of the €2.258 pump price.

7. France: €1.005 per litre
France levies €0.6075 per litre in excise on diesel, plus 20% VAT. Taxes represent 42.2% of the €2.383 pump price.

6. The Netherlands: €1.006 per litre
The Netherlands has the EU’s most expensive diesel at €2.579 per litre, yet ranks only sixth for tax. Its diesel excise is €0.55 per litre, compared with €0.84 on petrol, leaving Dutch diesel taxed 26.7 cents less than petrol.

5. Belgium: €1.014 per litre
Belgium charges the same excise, €0.600 per litre, on diesel and petrol. Because diesel’s pre-tax price is higher, 21% VAT pushes its tax bill 6.9 cents above petrol’s. Taxes account for 42.5% of the €2.387 price.

4. Germany: €1.024 per litre
Germany applies an energy tax of €0.4704 per litre, a carbon price of €0.162 and 19% VAT. Taxes account for 41.7% of the €2.457 pump price. That is set to change: on 25 September, the Bundestag approved a 14.04-cent cut in energy tax from 1 October to 31 December, worth around 17 cents per litre including VAT.

3. Finland: €1.030 per litre
Finland charges €0.511 per litre in excise and 25.5% VAT, the second-highest rate in the EU. Taxes make up 40.3% of Finland’s €2.555 pump price.

2. Italy: €1.034 per litre
Italian drivers paid €2.281 per litre according to the European Commission’s Weekly Oil Bulletin for 21 September. At the excise rate then in force, €0.5729 per litre, plus 22% VAT, taxes totalled about €0.984 per litre, or 43.1% of the pump price. On 26 September, excise rose to €0.6229 as the government scaled back its temporary tax discount. Using the same €2.281 pump price for illustration, the higher excise and standard VAT would lift total tax to about €1.034 per litre, or 45.3%.

1. Denmark: €1.081 per litre
Denmark’s excise of 4.261 Danish kroner per litre is worth about €0.571, and 25% VAT adds another €0.511. Taxes account for 42.3% of the €2.555 pump price.

What Comes Next For Drivers

With diesel and petrol prices at record levels in Europe, governments are under pressure to soften the blow. Tax relief is likely to remain a political lever as countries try to shield households and businesses from persistent fuel inflation.

From 1 October, Germany will cut petrol and diesel taxes by around 17 cents per litre, including VAT. Czechia’s diesel tax reduction is expected to save drivers about 10 cents per litre, while Spain has extended its fuel tax relief.

LVMH Revenue Rises, But China Weakness Continues To Weigh On Luxury Giant

by THEFUTURE.TEAM

A Softer Quarter Exposes The Limits Of Luxury’s Recovery

LVMH, the world’s largest luxury group and parent of Louis Vuitton, Dior, Celine and Hennessy, reported revenue of €18.5 billion in the three months to the end of September, underscoring both the scale of its business and the pressure building across parts of the luxury market.

The company’s revenue rose 1.2% year on year in the third quarter, following a 0.1% increase in the second quarter and a 5.9% decline in the first. The trajectory points to stabilization, but not yet to a convincing rebound.

Organic Growth Misses Expectations

Organic sales growth, which strips out currency effects and portfolio changes, slowed to 1% in the third quarter from 3% in the previous quarter. That result fell short of market expectations and reinforced concerns that the luxury cycle remains uneven.

For the first nine months of the year, LVMH generated sales of €57.1 billion, with organic growth of 2%.

In its statement, the company highlighted the breadth of its portfolio, saying that diversification continues to provide resilience in an uncertain geopolitical and economic environment. That remains one of LVMH’s defining strengths: when one category weakens, another can help offset the downturn.

China Remains The Key Pressure Point

LVMH said sales performed well in the United States, Europe and Japan, but conditions in China remained less favorable. That matters because the country has long been one of the most important growth engines for global luxury brands.

The fashion and leather goods division, LVMH’s most closely watched unit, saw organic sales fall 5% as weaker demand in China weighed on performance. Deutsche Bank said the decline was steeper than the roughly 2% drop expected by analysts.

The segment had delivered its first organic sales gain in two years in the previous quarter, making the latest retreat a notable setback.

Brand Equity Faces A Test In China

The quarter also highlighted the reputational risks facing global brands in China. Louis Vuitton drew criticism after suing local tea company Molly Tea over logo copying. Although the company won the case, the dispute sparked social media backlash and boycott calls, adding another layer of pressure to an already fragile environment.

For a company built on scarcity, aspiration and brand discipline, perception is an asset as valuable as inventory. In a market as digitally connected as China, that asset can shift quickly.

Mixed Performance Across The Portfolio

Not every division weakened. LVMH’s selective retailing business, which includes Sephora, posted an 8% organic sales increase. Watches and jewellery, along with wines and spirits, both recorded 6% organic gains.

That broad mix is precisely what has historically given LVMH an advantage over rivals: it can absorb softness in one category without relying on a single growth driver.

Analysts See A Longer Recovery Ahead

Deutsche Bank analysts said the results could lead to further cuts in earnings forecasts for the second half of 2026 and 2027. They added that it is difficult to see what could improve investor sentiment in the near term.

Still, the bank framed the weakness as cyclical rather than structural. In its view, recovery is taking longer because Chinese demand remains subdued, but the problem does not appear to reflect a permanent deterioration in the brand franchise. Analysts said ongoing brand initiatives are beginning to show results, though improvements are likely to remain gradual.

Investor Pressure Continues To Mount

LVMH’s share price has fallen nearly 40% since the start of the year. In September, L’Oréal overtook the group as France’s most valuable listed company, a symbolic shift that captures how sharply sentiment has changed.

Shares in LVMH were down more than 1.6% in Paris around 10 a.m. CEST following the release.

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