The German government is close to an agreement on a new package of measures against high fuel prices. Among the options being discussed are a cap on gasoline and diesel prices, tied to the movement of international oil prices, as well as a new reduction in the energy tax on fuels. The information appeared in German media in recent hours and was partially confirmed by Reuters, although there is still no final decision.
According to Handelsblatt, the ruling CDU/CSU and SPD are in an advanced stage of negotiations, with the final details being specified between the chancellery and the finance ministry. The plan could include two main measures – price cap and a new form of the so-called Tankrabatt, i.e. a tax break for fuels.
According to information from dpa, quoted by Handelsblatt, an effective reduction in the energy tax by around 17 euro cents per liter is being discussed. Reuters reports on a proposal for a reduction of around 14 euro cents per liter, citing a publication in Bild. This shows that the specific amount is still subject to negotiations.
The idea of a price cap is particularly sensitive because until recently the economy ministry opposed such intervention. Economy Minister Katharina Reiche earlier this week described the price cap and the excess profits tax as problematic and instead proposed a temporary reduction in VAT on fuel from 19% to 7%.
But now the pressure on the coalition is growing. According to Handelsblatt, it is the SPD that is pushing for a price cap, while the CDU/CSU already seems inclined to accept such a measure as part of a broader compromise. The cap is planned to be linked to the actual movement of international oil prices, rather than fixing a fixed price at the pump. Models used in Belgium and Luxembourg are being discussed as a reference point.
The reason for the urgent action is the record fuel prices in Germany. According to data published today by Tagesschau, a liter of Super gasoline cost an average of around 2.37 euros, and diesel – approximately 2.47 euros. Before the war with Iran, the prices were around 1.83 euros and 1.75 euros per liter, respectively.
The jump is linked to tensions on international energy markets, supply disruptions and high oil prices. The German government acknowledges that for many households, especially in rural areas and for people who travel by car daily, costs are already reaching critical levels. Chancellor Friedrich Merz promised the government to react quickly.
An additional question is who will foot the bill for the new “tank discount“. The previous temporary reduction of the energy tax this year is costing the federal budget around 1.6 billion euros. In the current talks, Berlin also wants the states to participate in financing the new package, which remains one of the main unresolved issues.
At the same time, German Finance Minister Lars Klingbeil is pushing for additional measures, including taxing energy companies' excess profits. Germany is among the EU countries that are also pushing for the European Commission to discuss a broader European response to the energy crisis.
At the moment, the most important clarification is that the price cap and tax cut have not yet been finally adopted. Negotiations are ongoing, and the government is expected to announce the specific package after by agreeing on the mechanism, the amount of the relief and its financing.