European governments have discussed imposing a bloc-wide windfall tax on energy companies as near-record fuel and gas prices place mounting pressure on leaders across the European Union, according to the Guardian.

The surge in prices has become a major domestic issue, with governments desperate to contain growing public discontent and the political challenge posed by the far right. Analysts have warned that the situation could develop into one of the continent’s biggest energy shocks in decades.

A German minister said that companies are ‘exploiting the situation’ in the Middle East, framing the debate around whether energy firms are profiting unfairly from the current climate of high prices.

The political stakes are heightened by a packed electoral calendar. Elections are due next year in eight EU countries, including France, Italy, Spain and Poland, and leaders are scrambling to head off the potential fallout from the energy shock.

A windfall tax is a levy imposed on companies that have earned unusually large profits due to circumstances outside their control, such as sudden shifts in global markets. Advocates argue such a measure could help redistribute gains at a time when households face steep costs.

The Guardian reports that discussions of a coordinated, bloc-wide approach reflect the scale of the challenge facing EU leaders as they try to balance economic pressures with rising political discontent.