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Germany’s fuel tax cut loses impact as diesel and petrol climb again

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Germany’s temporary fuel tax cut initially pushed pump prices down. But fresh figures suggest a sizeable share of the relief is not reaching drivers and transport operators. On top of that, the midday price-rise rule continues to trigger sharp price swings over the course of the day.

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Since the start of May, Germany has applied a time-limited reduction in energy tax on fuels. According to the Federal Cartel Office, this should translate (including VAT) into a theoretical reduction of up to around 16.7 cents per litre.

In the first days, part of that cut was clearly visible at filling stations. Data from tankpreise.de, clever-tanken.de and ich-tanke.de show a noticeable drop for diesel as well as Super E5 and E10 around the turn of the month.

For Super E10, the national average fell from roughly 2.10 euro per litre to just under 1.98 euro. Diesel moved in the same period from about 2.19 euro to around 2.06 euro per litre.

The Federal Cartel Office also recorded a clear decline. It reports that, on average, prices fell by just under 13 cents per litre from the end of April to the start of May. At times, the relief in the morning hours was closer to 14 cents.

Relief appears to reach motorists only in part

Even so, the average drop still fell short of the near-17-cent reduction that would have been possible on paper.

That is why ADAC says there are signs the tax cut is not being passed on in full. In its latest review, the nationwide average price for Super E10 fell by 7.8 cents per litre within a week, while diesel dropped by 10.5 cents.

On 5 May, ADAC put the daily average at 2.025 euro per litre for Super E10, with diesel at 2.095 euro.

ADAC also notes that market conditions have barely shifted since late April. Both the Brent crude price and the euro-to-dollar exchange rate have remained broadly around the levels seen before the rebate took effect.

The often-cited explanation that filling stations were still selling higher-tax fuel is, in ADAC’s view, no longer convincing. Five days after the measure began, that factor should be practically irrelevant.

The Federation of German Consumer Organisations voiced a similar concern, warning that instead of meaningful relief for motorists, the situation could once again turn into a “corporate discount”.

Oil industry rejects the criticism

The fuel and oil sector disputes those accusations. Fuels und Energie, the industry association, says the rebate has been fully passed on when measured against prices from 30 April. It adds that without the tax cut, prices would currently be significantly higher.

At the same time, the industry points to renewed increases in wholesale product prices on global markets.

The bft filling station association also argues that there is a time lag. The tax reduction applies only to fuel delivered from the start of May, it says, meaning an immediate and complete pass-through is “neither economically feasible nor required by regulation”.

The midday price-rise rule reshapes the daily price curve

Separate from the rebate debate, the midday price-rise rule introduced in April continues to fuel strong intraday price jumps.

Based on the so-called Austrian model, filling stations are allowed to raise prices only once a day at 12:00. Price cuts, however, can be made at any time.

In practice, this often leads to sharp increases around midday, followed by gradual declines over the following hours. According to ADAC, the cheapest time to refuel is currently often shortly before noon.

Figures from the Federal Cartel Office show that differences of a significant size can occur within just a few hours. On 1 May, diesel at times climbed during the day from around 2.04 euro to about 2.17 euro per litre. Super E10 rose from roughly 1.95 euro to about 2.07 euro.

Andreas Mundt, president of the Federal Cartel Office, recently spoke of “major deviations” between individual stations and brands.

Diesel remains a cost headache for hauliers

For transport companies, the rebate offers some relief, but it does not amount to a real easing of pressure.

Despite the tax cut, diesel still costs well above two euro per litre. At the same time, wide regional differences and extreme daily swings are making it harder for many hauliers to calculate costs reliably.

There is another factor: according to ADAC calculations, April was the most expensive month for refuelling since its tracking began. Fuel therefore remains one of the biggest uncertainty drivers for road rates in Germany.

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