Germany cuts fuel tax to contain rising petrol and diesel prices

The German government is moving forward with plans to introduce a fuel discount aimed at alleviating rising gasoline and diesel prices, after approving a bill on the measure, a government spokesperson said.

The energy tax on gasoline and diesel is set to be reduced by approximately 14 cents ($0.16) per liter from October 1 to December 31. According to the government, drivers could save up to 17 cents per liter at fuel stations, including value-added tax.

The Finance Ministry expects the measure to reduce tax revenues by 2.48 billion euros ($2.85 billion), with the German states bearing half of the cost.

The government hopes the discount will help mitigate the impact of the sharp rise in fuel prices since the outbreak of the war in Iran.

A similar discount was implemented in May and June, helping to curb fuel price increases at gas stations, although fuel companies did not pass on the full tax cut to drivers.