Ifo study finds only partial pass-through of fuel tax cut to drivers
The Ifo Institute reports that German fuel stations are passing on most, but not all, of the recent tax reduction to consumers.
Ifo’s analysis shows that the recent fuel-tax reduction is only partly reflected in pump prices across Germany. Florian Neumeier notes that diesel stations transferred roughly 15 cents of the 17-cent cut per litre, while gasoline stations passed on about 16 cents for E5 and 15 cents for E10 during the initial five-day window. The pass-through fluctuated, reaching full transmission on the first day of the month but dropping over the weekend, especially for the cheapest E10 grade, where the benefit fell by around 7 cents.
The institute’s methodology adjusts German prices against those abroad to filter out ordinary market swings. Critics, including Ifo colleague Christian Gréus, argue the measure is blunt and benefits higher-income households more than low-income drivers. The industry group Fuels und Energie (en2x) disputes Ifo’s findings, claiming that without the tax cut, prices would be uniformly 17 cents higher at stations.
Why it matters
Understanding how much of the tax cut reaches motorists reveals the policy's real impact on household fuel costs.
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