Germany agrees on 17-cent fuel tax cut as Dutch diesel hits record 2.824 euros

Agreement in Berlin

The German federal government and federal states reached an agreement on Friday, 18 September 2026, to reduce fuel excise duties on petrol and diesel by 17 cents per liter. The tax reduction is scheduled to remain in effect until the end of 2026, with German newspaper Bild reporting that the lower rates could take effect as early as 1 October. The measure will be co-financed by the German federal states, with the monthly cost to the federal budget estimated at approximately 800 million euros. The step repeats a policy introduced in May 2026 by Chancellor Friedrich Merz, when a similar two-month 17-cent cut was funded by higher tobacco excise taxes. The intervention followed climbing pump prices across Europe caused by conflict in the Middle East, which pushed German diesel to a record 2.471 euros per liter and petrol to 2.308 euros per liter.

Record prices in the Netherlands

In the Netherlands, fuel prices continued their upward trajectory without state intervention. The recommended retail price for a liter of diesel tracked by price comparison platform UnitedConsumers rose by one cent on Saturday, 19 September 2026, reaching 2.824 euros per liter. This figure surpassed the previous Dutch record of 2.819 euros set in April. Premium diesel also climbed by one cent to 2.914 euros per liter, while standard Euro95 petrol remained stable on Saturday at 2.712 euros per liter, close to its earlier weekly peak of 2.726 euros. Over the preceding seven days, Dutch diesel prices climbed by nearly eleven cents, while petrol increased by nearly three cents. UnitedConsumers fuel expert Derk Foolen stated that the Saturday rise reflected preliminary station data. Earlier in the month, EqoLibrium energy expert Hans van Cleef warned about potential price levels along motorways.

I do not rule out that we will reach 3 euros on the motorway.

Widening cross-border gap and price caps

The diverging policies between the two neighbouring nations are expanding the cross-border price gap. With the German tax discount in place, fuel price differences are projected to reach up to 0.57 euros per liter for petrol and 0.51 euros per liter for diesel. Dutch automobile association ANWB reported that average pump prices across the Netherlands stood at 2.43 euros per liter for petrol and 2.57 euros per liter for diesel, with highway stations charging higher recommended rates. To create a longer-term mechanism once the temporary excise cut expires at the end of December, the German government is preparing a statutory fuel price ceiling, expected to enter force by 1 January 2027 at the latest. The Social Democratic Party has supported the ceiling, while German Minister for Economic Affairs Katherina Reiche had previously opposed it.

International models and windfall tax proposals

Germany's proposed price ceiling draws on models already established in Belgium and Luxembourg. Belgium has determined maximum fuel prices on each working day via a statutory formula since the 1974 oil crisis, while Luxembourg sets uniform caps multiple times a week based on procurement and distribution costs. In tandem with domestic price limits, the German government announced plans to advocate for a European windfall tax on excess oil company profits during the informal European Union finance ministers meeting in Dublin. A similar levy was applied in 2022 and 2023 following Russia's invasion of Ukraine, though the European Commission has not presented new windfall tax proposals for the current price surge.