Germany Racing to Cut Fuel Tax by May 1: Coalition Fast-Tracks Relief Package

The German federal government is pushing ahead at speed with its planned fuel price relief: the temporary reduction in mineral oil tax is set to be fast-tracked through the Bundestag and Bundesrat. Union parliamentary manager Steffen Bilger (CDU) announced in Berlin on Tuesday that the measure is targeted to take effect on May 1.

The Bundestag is scheduled to debate the proposal for the first time this Thursday, with a vote planned for the following week. Opposition parties criticized the planned measures and questioned their effectiveness.

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According to Bilger, an emergency session of the Bundesrat on April 24 will also be necessary to implement the tax cut by early May. He noted that the CDU/CSU-governed states are prepared to convene such a session. Support was also signaled from the SPD side.

An emergency session of the upper house was "fundamentally possible, since everyone wants quick relief for citizens at the pump," said Saarland's Minister-President Anke Rehlinger (SPD) in the Rheinische Post (Wednesday edition).

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The coalition committee had agreed, in response to sharply rising fuel prices following the Iran war, to cut the energy tax on petrol and diesel by 17 cents per liter for two months. In addition, employers will be given the option to pay employees a tax-free "relief bonus" of €1,000.

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Critical voices also emerged from within the CDU. Saxony's Minister-President Michael Kretschmer criticized the announced two-month mineral oil tax cut as insufficient, telling ZDF: "To get Germany back on its feet, 17 cents off petrol is not the solution."

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He also said he was hearing sharp criticism from the public regarding the planned €1,000 tax-free bonus, particularly from tradespeople and small business owners, who see it as an "insult." As employers, they feel the federal government is trying to offload its responsibilities onto them, Kretschmer said.

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Saxon CDU MP Florian Oest echoed similar sentiments. "The 17-cent reduction is a first step, but it falls far short of what's needed," he told Stern magazine. Businesses view the measures as a "sheer mockery", especially the €1,000 bonus: "Many companies simply cannot meet this expectation given their already strained financial situation."

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CDU parliamentary group leader Jens Spahn pointed out that the federal government itself cannot pay the bonus to its own employees due to its large deficit. "I currently see no basis for the federal government to pay a corresponding bonus to its staff," Spahn said.

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Greens parliamentary leader Katharina Dröge countered the coalition's decisions with her own proposals: she called for a reduction in electricity tax for all consumers, as well as a general speed limit, in response to the current energy crisis. Cutting electricity tax would be "relief that would genuinely reach people," Dröge said in Berlin. By contrast, she called the fuel discount agreed by the CDU/CSU and SPD "nonsensical," arguing that it "sets the wrong incentives."

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AfD parliamentary leader Alice Weidel demanded a comprehensive reduction in energy taxation. "The biggest profiteer at the pump is the German tax authority," she said in Berlin. "Without taxes, a liter of petrol would cost less than one euro."

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The Left Party accused the federal government of poor crisis management. "After the Easter break, we thought things would really get moving," said party leader Sören Pellmann in Berlin. But the plans to ease the burden on citizens fall far short, he added. "This borders on a refusal to govern."

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SPD parliamentary leader Matthias Miersch defended the coalition's package of measures against criticism. "It is good that the coalition found the strength to act together in such a time of crisis," he said in Berlin. However, he admitted that in the interest of speed, the decisions had required accepting a somewhat scattershot approach "at certain points."

He also acknowledged that the tax-free €1,000 bonus for employees would not apply to everyone, but appealed to companies to make use of the instrument for their workers. He once again pushed for a windfall profits tax on energy companies and tougher competition law.

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