The Swedish government has temporarily reduced the VAT on food from 12% to 6% until the end of December 2027, a measure that includes takeaway food. Swedish authorities have also cut fuel taxes, leading to long queues at Systembolaget, grocery stores, and fuel pumps. The VAT reduction is already noticeable in Hemavan, where Norwegians are shopping extra much ahead of Easter, and tourism and Norwegians account for 75% of turnover at one store there. Cross-border trade is becoming increasingly larger, with billions of Norwegian kroner flowing across the border for shopping, and Nordby Supermarket outside Strömstad has seen a huge increase in Norwegian shoppers, setting limits on purchases like Pepsi Max.
Fuel prices in Norway have risen sharply recently due to the war in the Middle East, which is pushing up oil prices, a trend mirrored across Europe where the conflict has sent prices soaring, with Germany among the hardest hit. Germany has high fuel prices due to government policies aimed at reducing carbon emissions, with taxes and levies comprising over half the pump price. The war in Iran has made price differences even more dramatic, with prices in Germany rising to €2.07 per litre for petrol and €2.27 for diesel.
In Norway, petrol prices are nearing 25 kroner per liter, while in Sweden they are around 16 kroner for petrol and 21 kroner for diesel. Fuel is cheaper in Arendal than in Grimstad, saving five kroner per liter at Circle K on Stoa in Arendal. At the time of reporting, the price at Circle K in Grimstad was over 25 kroner per liter, and nine out of ten of the cheapest fuel pumps in Norway were located in eastern Agder, with seven in Arendal and two in Froland. There is increased awareness about fuel prices in Norway, with Facebook groups and the DrivstoffAppen app having over 1.3 million downloads.
Sweden reduced fuel taxes in 2024 and is considering further reductions if the war worsens, while Norway has no such plans. Finance Minister Jens Stoltenberg stated Norway will not introduce subsidies when oil prices rise. Fuel accounts for about 30% of operating costs for Norwegian truckers, and price increases are passed on to consumers. Many Norwegians travel to Sweden during Easter for shopping and car enthusiast events, especially since shops are open in Sweden on Maundy Thursday.
Poland is preparing to curb a surge of German 'petrol tourists' crossing the border to fill up their tanks due to soaring fuel prices in Europe. Thousands of German motorists are driving into Poland where fuel prices are lower, causing long queues and localized shortages. Faced with sky-high petrol prices in the wake of the Iran war, increasing numbers of Germans are embarking on 'fuel tourism' trips across the border. While cross-border refuelling has long been a feature of life in parts of Europe, the scale of the current surge is new.
Diesel is about €0.28 per litre cheaper in Poland than in Germany. Some fuel stations in Poland are implementing volume restrictions or banning Germans from filling containers other than their vehicles. Many arrive with jerry cans, filling up as much as they are legally allowed to before heading home. Some stations are voluntarily implementing volume restrictions, limiting the amount of fuel sold per car to maintain supply for residents, while others have banned Germans from filling up anything other than their vehicles.
Polish authorities have said the influx is leading to fuel shortages for residents, with some stations forced to close after running dry. Mayors in several border towns have accused German motorists of 'squirrelling away' fuel, exacerbating supply problems. The trend is delighting petrol station operators but infuriating local authorities.
Warsaw is promising tax relief on fuel before the Easter break, which could intensify the flow of traffic across the River Oder. Under rules in force since Tuesday, the maximum pump prices on Wednesday were set at PLN 6.21 (EUR 1.45) per liter for 95-octane gasoline, PLN 6.81 (EUR 1.59) for 98-octane, and PLN 7.66 (EUR 1.79) for diesel. A reduced 8-percent VAT on fuel also took effect and will remain in place through April 30. The new pricing system was introduced under legislation requiring fuel retailers to stay at or below a daily maximum price set by the energy ministry. Sales above the cap are punishable by fines of up to PLN 1 million (EUR 233,000), with checks carried out by the National Revenue Administration. A separate regulation in force since Monday cut excise duty on fuels through April 15.
Conflicting reports exist on the scale of German fuel tourism to Poland. State news agency PAP reported there were no signs of large-scale 'fuel tourism.' At stations in Lubieszyn near the German border, short lines formed around midday, with two or three cars waiting at each pump. At one Orlen station, about 20 vehicles with German license plates filled up over a 15-minute period. Station staff in Kostrzyn nad Odrą and Słubice reported a slight increase in German customers, but no unusually heavy traffic.
ADAC, the German motoring association, has long tracked price differences, publishing comparisons to help drivers decide on cross-border trips. German newspapers have begun publishing detailed maps showing where cross-border trips are financially worthwhile. Political opponents have called for price caps, but Berlin has responded cautiously, announcing only that petrol stations may raise prices no more than once per day. With the government reluctant to introduce sweeping relief, motorists are increasingly looking west as well as east, with diesel about 16 cents per litre cheaper in France and petrol about 10 cents cheaper.
Regional variations in cross-border fuel tourism in Poland are evident. In Cieszyn, near the Czech border, station workers said many Czech drivers had arrived since Tuesday. A price gap of about PLN 1 (EUR 0.23) per liter between nearby stations in Poland and the Czech Republic can translate into significant savings on a full tank. In Zgorzelec on the German border and in the southeastern Podkarpacie region near Slovakia, residents and station employees reported no noticeable increase in foreign traffic. One station in Dukla said traffic had even eased slightly in recent days. In those towns, cross-border shopping is common, with German visitors often combining shopping trips with refueling.
According to data from e-petrol.pl, average retail prices in Poland fell to PLN 6.16 (EUR 1.44) per liter for 95-octane gasoline, down from PLN 7.14 (EUR 1.66) a week earlier, while diesel dropped to PLN 7.54 (EUR 1.76) from a record PLN 8.69 (EUR 2.03). On Wednesday, border-area gas stations saw an uptick in foreign drivers, especially from Germany, following the introduction of maximum fuel prices and a lower VAT rate.
The economic effects of these trends include potential revenue shifts for Sweden and strain on Norwegian businesses, while policy uncertainties persist regarding the effectiveness of Polish measures. The long-term impacts on Norwegian businesses from the outflow of shopping and fuel purchases to Sweden remain unclear, as does how much revenue Sweden is losing or gaining from the VAT reduction on food and fuel tax cuts due to increased cross-border trade. Additionally, the extent to which fuel price increases in Europe are directly attributable to the Middle East conflict versus other factors like government policies is not fully determined.
Unknowns include what specific measures Poland is implementing to curb German 'petrol tourists', and how effective they are, as well as how other European countries beyond Poland, Germany, Sweden, and Norway are affected by cross-border fuel and shopping tourism. The effectiveness of Polish measures, such as price caps and tax relief, in mitigating shortages and managing cross-border flows has yet to be assessed, and broader European impacts may extend to neighboring regions experiencing similar price disparities.