The German Bundestag held its first debate on Thursday regarding the government coalition's plans to temporarily reduce mineral oil taxes on petrol and diesel due to soaring fuel prices resulting from the Iran war. The governing coalition parties, the Union (CDU/CSU) and SPD, defended the proposed fuel tax discount, while opposition parties criticized it as inadequate and warned that oil companies might not pass the tax savings on to consumers.
Following two days of crisis talks over the weekend concerning relief measures for the energy crisis caused by the Iran war, the leaders of the black-red coalition presented the fuel tax discount plan on Monday. The proposal includes reducing the mineral oil tax on both petrol and diesel by 17 cents per liter for two months starting May 1st. The Federal Ministry of Finance estimates the cost of this relief measure at €1.6 billion.
"This is a good measure, because it takes effect quickly, because it is unbureaucratic to implement," said SPD Member of Parliament Wiebke Esdar in parliament. She added that the measure is also "fair, because it provides relief exactly where prices have skyrocketed in recent weeks." Through tightening of competition law, she assured that oil companies must actually pass the tax reduction on to consumers.
CDU Member of Parliament Mathias Middelberg stated that with the fuel tax discount, the black-red coalition is sending "a targeted relief signal" to commuters and the transport and freight industry. He said this would quickly take effect at the fuel pump. Middelberg simultaneously acknowledged: "It is not complete relief, it is only support. We cannot insure against all risks."
The AfD criticized the measure as ineffective and accused the government of itself profiting from higher tax revenues due to increased prices at the pump. "The biggest beneficiary of this price crisis sits there on the government bench," said Member of Parliament Kay Gottschalk. "You are taking more than half at the pump." The AfD proposed in its own motion to increase the commuter allowance for workers who drive to work to 50 cents per kilometer.
Greens parliamentary group leader Katharina Dröge called the revival of the fuel tax discount previously used by the traffic light coalition "a hare-brained idea." She warned that oil companies would again use this as an opportunity to "rip off" consumers.
The Greens therefore demanded a windfall profits tax to skim off excess profits made by oil companies during the crisis. Dröge called on the government to pay money directly to citizens who need support through a payment mechanism, rather than implementing the fuel tax discount.
Left Party parliamentary group leader Heidi Reichinnek described the government's relief plans as "absolutely terrible." She too demanded a windfall profits tax for oil companies "to break this spiral of greed." According to the Left Party, more effective relief measures than the fuel tax discount would include an "energy crisis payment," the reintroduction of the nine-euro ticket for local public transport, and reducing VAT on basic foodstuffs.
According to the Federal Ministry of Finance, the relief provided by the fuel tax discount will cause tax revenue losses of 1.6 billion euros. However, according to a study by the Rheinisch-Westfälische Technische Hochschule Aachen (RWTH Aachen University), the tax reduction would primarily benefit high earners, as they consume more fuel on average.
According to simulations by the Aachen researchers, the top ten percent of households by income would receive relief of 21.64 euros for the entire period, the magazine "Der Spiegel" reported on Thursday in advance excerpts from the study. Medium to high-income households would benefit most with up to €31.06. The bottom ten percent of households by income, however, would only receive 6.48 euros in relief.
After Thursday's deliberations, the Bundestag is scheduled to address the relief legislation in its second reading next week. For the law to take effect as planned on May 1st, the Bundesrat would need to decide on it at a special session on April 24th.
Even if the timeline is met, fuel is unlikely to become cheaper everywhere immediately from May 1st. The reason is that taxation occurs at the fuel storage depots, which are "far upstream" of consumption by end customers, as stated in the draft law. This could "lead to fuel sold in the first days after the tax reduction still having been taxed at the original tax rate."
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