German government moves forward with temporary fuel tax cut

According to a government spokesperson, the cabinet has adopted the draft legislation for a temporary fuel tax rebate via a written circulation process. The plan trims the energy tax on both diesel and gasoline by roughly 14 cents per litre, and the accompanying reduction in value-added tax adds another three cents, resulting in a total pump-side relief of up to 17 cents per litre. The finance ministry expects the federal budget to collect less tax revenue, a shortfall that will be split evenly with the Länder.

The rebate is intended to cushion consumers and businesses from the sharp price increases that have followed the Iran conflict. A similar rebate was applied earlier in the year, which had noticeably dampened prices, although oil companies did not fully pass the savings on to drivers at that time.