The federal government and Germany’s states have agreed on a new fuel discount in response to high prices at petrol stations. According to the federal government, the discount will amount to 17 cents per litre from October until the end of the year. The federal and state governments will share the cost of the relief package, which will total €2.5 billion. From 1 January at the latest, a fuel price cap modelled on those used in Luxembourg and Belgium is then to be introduced.
“Anyone who depends on their car every day is reaching the limits of what they can afford,” Federal Chancellor Friedrich Merz (CDU) said. “We are showing that we are resilient in times of crisis and that we are helping citizens.” However, Merz also acknowledged that €2.5 billion is “no small amount” at a time when public finances are under pressure.
To introduce the fuel price cap, the federal government will now hold talks with the mineral oil industry, according to the statement. “Security of supply must be guaranteed,” the government said.
The possibility of introducing a windfall tax, which has been particularly advocated by the SPD, was also apparently discussed. “The federal government welcomes the discussions within the European Union on examining measures targeting the mineral oil industry, along the lines of the EU Energy Crisis Contribution of 2022,” the government said.
At the time, the EU temporarily introduced a mechanism to collect so-called windfall profits from energy companies as an emergency response to high energy prices following Russia’s invasion of Ukraine. Federal Finance Minister Lars Klingbeil (SPD) has been campaigning in Brussels for weeks for a new version of the measure. The European Commission has so far remained cautious.
Chancellor Merz and Federal Economics Minister Katherina Reiche (CDU) had also repeatedly rejected such an instrument. Klingbeil said: “We are continuing to work to ensure that we can return the crisis profits of mineral oil companies to citizens.”
The possibility of making direct payments to citizens to compensate for high energy prices will also continue to be pursued, according to the government. Among others, Reiche had proposed such payments for low-income households. “The federal government will continue to closely monitor price developments and possible economic consequences in order to provide targeted relief to particularly affected people and companies where necessary,” the government said in its statement.
“The federal government is creating the conditions for an income-based direct payment mechanism.”
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