Reduction of taxes on gasoline and diesel fuel in Germany
People’s bank accounts have received a real blow in recent months as a result of soaring fuel prices, energy and food. Therefore, the federal government is taking a number of relief measures, including Ticket 9 euros and lower fuel taxes, with Chancellor Olaf Scholz promising that the measures would benefit citizens “directly, quickly and purposefully”.
While a ticket costing 9 euros promises cheap access public transport during the summer months drivers can also count on some relief after the Bundestag and Bundesrat approved a proposal for a minimum allowed in the EU for three months, which costs the state almost 3.15 billion euros.
How much is a fuel tax rebate?
After all, about 50 percent of the cost of fuel in Germany is made up of taxation, tax cuts can actually make a significant difference. The tax burden on gasoline in Germany will be temporarily reduced by 29.55 cents per liter – or almost 35.2 cents per liter, including VAT. Taxes on diesel are reduced by 14 cents per liter, or 16.7 cents with VAT.
However, it is not yet clear to what extent oil companies will pass this discount to consumers, but it is estimated that gasoline will be cheaper by 15-30 cents per liter, and diesel fuel by 11-14 cents cheaper.
How long will fuel be cheaper?
Initially, the measure is limited to three months, so the discount will be valid only in June, July and August.
However, before June 1, everyone will start to go to gas stations to refuel tanks at a discount, it should be borne in mind that experts expect that before prices fall significantly, there will be a lag of several days.
This is because gas station owners are more likely to try to sell off their existing stocks of (more expensive) fuel before new, lower prices are introduced. However, June 1 is likely to have long queues at gas stations, and so the ADAC has advised people not to postpone a refueling trip until they end at the end of May.
What do people say about lowering the fuel tax?
While this move undoubtedly facilitates those who feel the pumping pinch, this move is not without its critics. The plan came under fire especially due to the fact that gasoline prices have fallen markedly in recent weeks after exploding immediately after Russian invasion of Ukraine.
Others argue that the government should not subsidize fuel, arguing that it encourages people to use their cars and thus sends the wrong message when a country is busy saving and stockpiling energy for the winter. “In this situation, lower gasoline prices are counterproductive because people will drive more,” – said ARD economist Veronica Grimm.
Economy Minister Robert Habeck countered the claim, saying the prolonged high fuel price would, however, scare away many people behind the wheel. “Many people suffer from high fuel prices,” he said. “They will still suffer, even if the fuel tax is reduced for three months. So to be honest, it’s not very cheap to drive. “
The Verivox price comparison portal also claims that the aid package is a little more than a drop in the ocean compared to the rapidly rising prices faced by families in Germany. According to their estimates, in 2022 the average family will have an additional burden of 2,408 euros per year, while the government package brings only about 1,035 euros in relief.
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