Germany parliament approves temporary cut in fuel taxes

Germany’s parliament on Friday approved a temporary reduction in fuel taxes aimed at easing the burden of high petrol and diesel prices on households and businesses.

The Bundestag, the lower house, and the Bundesrat, which represents Germany’s 16 federal states, both approved the measure.

The federal government said the tax cut would take effect on Oct. 1 and remain in force until the end of the year.

Under the measure, petrol and diesel taxes will be reduced by an amount expected to provide relief of about 17 euro cents (0.19 dollars) per litre.

A similar temporary reduction was introduced in May and June.

The government estimated the cost of the latest measure at about 2.5 billion euros (2.85 billion dollars), with the federal states expected to cover half of the cost.

The government attributed the increase in energy and fuel prices partly to renewed escalation of conflicts in the Middle East, saying the situation had placed additional pressure on consumers and the German economy.

It said further that measures were being considered to contain fuel costs, including talks with the oil industry on a temporary cap on petrol and diesel prices.

According to the government, the price cap is expected to be introduced by Jan. 1, 2027, at the latest.

Higher energy costs has also contributed to inflationary pressure in Germany.

Official data shows that the country’s inflation rate rose to 2.9 per cent in August from 2.8 per cent in July, while energy prices increased by 10.5 per cent year on year.