BERLIN (dpa-AFX) - Germany's "Grand Coalition" plans to provide relief to motorists in response to soaring fuel prices. Energy taxes on diesel and gasoline are to be reduced by approximately 17 cents gross per liter for a limited period of two months, according to an announcement by the CDU, CSU, and SPD in Berlin.
Chancellor Friedrich Merz (CDU) stated that the move is intended to rapidly improve the situation for drivers and businesses. The federal government expects the mineral oil industry to pass these savings on to consumers. According to Labor Minister Bärbel Bas (SPD), the total relief for consumers and the economy regarding fuel prices is expected to amount to approximately 1.6 billion euros.
Furthermore, the coalition intends to allow employers to pay a tax- and duty-free relief bonus of 1,000 euros in 2026. To offset the resulting shortfall in tax revenue, tobacco taxes are slated for an increase as early as 2026.
In this context, the coalition welcomed the European Commission's announcement that it is considering measures against the mineral oil industry, analogous to the 2022 EU energy crisis contribution. This refers to a windfall tax. The financing of the tax relief is to be secured through antitrust or tax-based measures targeting oil companies.
Coalition leaders deliberated late into the night at Berlin's Villa Borsig regarding the energy price crisis and upcoming reform projects. Negotiations continued throughout the entire weekend.
Fuel prices surge
Fuel prices have skyrocketed since the outbreak of the war in Iran. Following the start of the conflict on February 28 with US-Israeli strikes on Iran, Tehran blocked the Strait of Hormuz off its coast, a critical artery for oil transport. Maritime transit effectively ground to a halt.
At the recent peak shortly after Easter, the national daily average for a liter of diesel was more than 70 cents higher than before the war began, while Super E10 was up by more than 41 cents, according to ADAC data. Initial federal government measures - including the "12 o'clock rule," which restricts price hikes to once per day, and expanded powers for the Federal Cartel Office - initially failed to have a significant impact.
Prices had recently retreated slightly as oil prices softened. However, the current rebound in oil prices following failed negotiations between the US and Iran is expected to exert upward pressure once again.
On Saturday, the national daily average for Super E10 gasoline stood at 2.101 euros per liter, with diesel at 2.301 euros. Both figures represented slight declines from Friday. Figures for Sunday are expected later this morning. By Sunday afternoon, fuel prices had already tightened significantly. Between 11:45 a.m. and 12:15 p.m., diesel rose by 9.7 cents to 2.364 euros per liter, while Super E10 increased by 9.3 cents to 2.164 euros, according to the ADAC.
Coalition infighting
Ahead of the weekend, tensions within the coalition over consumer relief measures intensified. While Vice Chancellor Lars Klingbeil meets with union and employer representatives, Economy Minister Katherina Reiche (CDU) has launched a sharp attack against him. The Chancellor has called for restraint./hoe/DP/men
