Rising fuel costs due to the Iran conflict give European railways an opportunity - can they seize it?

Go back a couple of short years to the months prior to the 2024 European Elections, and railways were trying to set their political direction. This was is in CER’s manifesto (PDF):

“the regulatory framework today is not fair, with railways carrying many costs and obligations not imposed on other transport modes. Much remains to be done to redress imbalances in conditions and pricing to access infrastructure, energy taxation, VAT rules”

Meanwhile SNCF had this to say on a dedicated webpage:

Level the playing field
All external costs for transport operations must be internalized, so prices reflect each mode’s true cost to society. This is the only way to create fairer competition.

How to get there
- Require carriers to inform shippers and passengers of the external costs of transport, starting with greenhouse gas emissions.
- Accelerate revision of the Energy Taxation Directive to make fuel taxes more equitable.
- Make road use charges more equitable and include external costs.
- Exempt international passenger rail transport from VAT uniformly across the EU, as is the case for air transport

Now what has happened in the early months of 2026 is not this. It is not an explicit levelling of the playing field, and the taxation levels question remains unanswered.

But there is a massive hike of crude oil prices (diesel hit its highest price ever today at pumps in Germany today), and even the prospect of looming fuel shortages loom. Some parts of Asia and Australia are already planning for this. And with no imminent answer to the problems posed by Iran’s blockade of the Strait of Hormuz, these problems are not going to ease swiftly. Oil is going to be expensive for a good while.

I do not have Europe wide statistics, but in Germany 99% of long distance passenger kilometres and 80% of regional passenger kilometres on the railway are done on electric trains (see this from Allianz Pro Schiene). There is no transport mode in Europe with as low a dependence on fossil fuels as the railways.

At the very least, all of this could be the start of a tilting of the playing field in rail’s favour.

Passengers – at least in Germany – are individually responding to the price signals. Easter weekend looks like it is going to be very busy on Germany’s trains. Meanwhile in France, by chance, a long planned new slow low cost service will open this weekend. Lithuania has halved train ticket prices for two months due to rising fuel costs. However Eurostar – that managed to at short notice last year run extra services when Heathrow was closed – hasn’t done anything similar in response to the oil price hike.

Now don’t get me wrong here: stepping up services is hard, especially when every last bit of slack has been squeezed out of the rail system in recent years, and the financial scars from the COVID pandemic have not all fully healed.

But a confident railway sector would see this oil price rise as a chance, an opportunity to step up – at least in terms of rhetoric and the confidence in its political demands. So far in Europe I see scant little evidence this has started to happen.