Fuel discount ends on July 1 – Coalition plans swift response to price increases

Background: Two months of relief costing around 1.6 billion euros

The coalition is also justifying the lack of an extension with the budget situation. Müller said that taking on new debt for the fuel discount is out of the question under the current budgetary conditions: "Wir können es uns in der aktuellen Lage nicht leisten, Schulden dafür aufzunehmen." According to the federal government, the relief measure in effect since May 1 costs the federal government around 1.6 billion euros.

At the same time, Müller and Zorn announced their intention to react swiftly should prices develop dramatically from July 1 onward. "Ändert sich die Lage ab 1. Juli dramatisch, können wir schnell reagieren." They did not commit to specific measures or a concrete price threshold. The politicians left open exactly where the intervention threshold would lie. They said they did not want to show from what price level the state would intervene. Swift action is also possible during the parliamentary summer break and the non-sitting period; in case of emergency, the Bundestag will be convened for special sessions.

Industry reactions: Corporations reject criticism

According to the parliamentary group leaders, various relief measures are being discussed: targeted subsidies for households with low and middle incomes, a higher commuter allowance, lower energy taxes, a reduction in the electricity tax for everyone, a fuel price cap, as well as a windfall tax on oil companies. Müller also announced that cartel law should be further tightened to create more transparency in the fuel market. The goal is: "Den Markt aufräumen und mehr Transparenz schaffen."

Both politicians also warned the mineral oil companies against excessive price hikes after the discount expires. According to the taskforce heads, the background is the industry's high profits: companies have "so viele Gewinne eingefahren wie nie zuvor – gerade auf dem deutschen Markt," Zorn said. The mineral oil association Fuels und Energie rejected the criticism and pledged to pass the tax cut on to customers in full until the end of its term.

According to ADAC figures, motorists in May had to pay an average of 1.983 euros per liter of Super E10 nationwide; before the fuel discount, the figure in April was 2.109 euros, roughly 13 cents higher. For diesel, the May price was 1.991 euros, a decrease of 27 cents compared to April. In May, the inflation rate in Germany fell noticeably after the introduction of the fuel discount: goods and services rose by just 2.6 percent compared to the same month the previous year, after 2.9 percent in April.

Ifo analysis: High-mileage drivers benefit the most

According to an analysis by the Ifo Institute, the mineral oil companies passed on the tax relief to a large extent to motorists. However, part of the approximately 1.6 billion euros in tax funds remains with the companies, the institute announced. According to the calculations, high-mileage drivers and owners of cars with high fuel consumption benefit most from the fuel discount. The difference between the highest and lowest price on an average day was 14.6 cents per liter for Super E10, and 18.4 cents per liter for diesel.

The Federal Ministry of Finance also commented. Labor Minister Bärbel Bas said on the ZDF "Morgenmagazin" that the discount was set for two months, until the summer, and beyond that they would monitor the situation and "natürlich andere Entscheidungen vielleicht noch treffen müssen." Asked about possible relief measures, Bas said: "Wenn es zu großen Belastungen kommt, werden wir sicherlich darüber auch nochmal reden müssen." The coalition also assumes that the federal states will go along in the Bundesrat on possible follow-up measures.

Consumer protection and ADAC: Demand for follow-up measures

The Federation of German Consumer Organizations generally assessed the end of the measure positively. Board member Ramona Pop said in a statement: "Der Tankrabatt hat sich nicht bewährt, daher ist es gut, dass er nicht verlängert wird. Statt neuer Schnellschüsse braucht es jetzt dauerhaft wirksame Vorschläge." A reduction in the electricity tax for private households could provide direct relief.

The ADAC simultaneously warned of rising burdens. An ADAC spokesperson said: "Das Ende des Tankrabatts darf nicht bedeuten, dass Überlegungen für die Entlastung der Menschen eingestellt werden." The war in the Middle East would continue to drive up energy prices in particular, and motorists would foreseeably see prices above two euros at the pumps again. "Die Koalition muss kurzfristig Maßnahmen abstimmen, die zielgerichtet besonders Betroffene entlastet. Ein Auslaufen des Tankrabatts ohne baldige Anschlussmaßnahmen sei nicht vermittelbar."

From the perspective of gas stations, the end is not surprising. "Wir haben nichts anderes erwartet," said the spokesperson for the Tankstellen-Interessenverband (TIV), Herbert Rabl, to the "Rheinische Post."

Outlook: Cartel law, commuter allowance, and possible windfall tax

The 12 p.m. refueling rule, which had been introduced in April because of the Iran war to curb the rise in fuel prices, had already come into force before the fuel discount. Both instruments interlock but must be assessed separately.

With the end of the discount, the measure coincides with the start of the summer holidays in several federal states – a period in which many families embark on longer car trips and fuel demand traditionally rises.

The Federal Ministry for Economic Affairs and the Federal Ministry of Finance initially declined to comment on the details of possible follow-up regulations. The coalition is not naming concrete steps or timelines. Observers expect the political debate over fuel prices, the commuter allowance, and a possible windfall tax to pick up pace in the coming weeks.

In the medium term, the tightening of cartel law is also likely to remain on the agenda. Müller had announced that competition law should be used more strongly against possible price-fixing agreements by mineral oil companies. The Ifo Institute had pointed out in its analysis that the companies did not pass on part of the tax funds to consumers – a finding that is being used in the political debate as an argument for more market oversight.

How fuel prices will develop concretely after the fuel discount expires remains open. However, observers expect a rise as soon as the tax advantage disappears in July. The coalition's Fuel Taskforce announced that it would monitor the market situation closely and take short-term action if necessary.