Germany's temporary fuel tax cut

The Measure

The Bundestag and Bundesrat passed a 16.7-cent per liter cut in energy taxes on petrol and diesel, running 1 October to the end of December 2026. The 2.5 billion euro cost is split equally between federal and state governments. No decision to extend it beyond 31 December has been reported as of 16 October.

Pass-Through and Prices

DIW estimates about two-thirds of the reduction reached motorists. Compared with France, which has no equivalent cut, it finds an effective cut of 10 to 11 cents per litre, falling to roughly 9 cents from 8 October. DIW blames limited competition among refineries and wholesalers.

The ifo Institute estimates higher pass-through for 7–13 October: 13 cents for E10, 14.7 for E15 and 13.5 for diesel. ADAC put E10 at 2.146 euros per litre on 14 October, more than 3 cents above its 1 October level.

Oil and Inflation

Brent fell about 1% to roughly $105 a barrel on 15 October, per Reuters. September inflation was 3.3%, before the cut. The test is whether Brent holds above $100 and keeps E10 near 2.15 euros.