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ECONOMY

Drivers in Germany face record fuel costs

Diesel is more expensive than ever at gas stations in Germany, while petrol prices are also approaching record highs.

A driver fills his car with Diesel
A driver fills his car with Diesel at a German petrol station. Photo: picture alliance/dpa | Carsten Koall

As of Sunday, the national price of a litre of Diesel was €1.555, according to the European motor association ADAC. This is just above the previous record price of €1.554 per litre set on August 26th, 2012.

For drivers of non-Diesel cars, there’s also little reason to celebrate, as petrol prices also look set to exceed previous records in the coming weeks.

The price of Super E10, a type of petrol with organic components, stood at €1.667 per litre on Sunday – just 4.2 cents short of its previous record price of €1.709, which was reached on September 13th, 2012.

Germany’s fuel prices have been on an upward curve for months. 

The main driver of this is the price of oil, which rose after last year’s Covid slump to hit multi-year highs on Monday.

In the case of Diesel, the problem has been compounded by the demand for oil for heating houses, which tends to rise in autumn and winter. Since the beginning of the year, the government’s CO2 tax – which currently stands at €25 per tonne – has also added around 6 to 8 cents to the cost of a litre of Diesel. 

READ ALSO: Why everything is suddenly getting so expensive in Germany

The development is particularly drastic when compared with the previous year. At that time, oil and fuel prices sunk dramatically due to the Covid crisis, before the trend started to reverse at the beginning of November 2020.

Debates over tax cuts

With consumer prices rising across the board in Germany, politicians are debating how best to ease the burden on cash-strapped households. 

Most recently, the outgoing transport minister Andreas Scheuer (CSU) called on the government to prepare short-term countermeasures – such as tax cuts – if energy and fuel prices continue to rise sharply.

A large part of the fuel price at the pump is taxes and duties. For Diesel, at the current price level, these include €0.25 VAT, around €0.47 mineral oil tax and the 6 to 8 cents from the CO2 tax.

With heating and energy costs placing pressure on households, the outgoing government is already looking for ways to ease the tax burden on companies in order to limit the price hikes.

On Thursday it announced plans to cut the EEG levy in order to provide relief for struggling energy consumers from next year. 

READ ALSO: Germany slashes electricity levy as energy prices surge

The EEG levy currently adds 6.5 cents onto the price of a kilowatt hour of electricity in Germany. This is used to support to support businesses in the renewable energy sector.

From 2022, however, the levy will be reduced to 3.72 cents per kilowatt hour, with the difference partially made up by goverment subsidies. 

If a similar thing is done in for car drivers, this could see prices fall once more – though the change would not take effect immediately, as the savings for providers would take a while to be passed on to consumers. 

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MONEY

Wohngeld: How people in Germany can get help with rising living costs

Many households in Germany could be eligible for increased financial support with their rents and bills from next year. We break down who should apply and how much help they could receive.

Wohngeld: How people in Germany can get help with rising living costs

The cost of living is rising across the board, and nowhere is this being felt more than in the home. For over a year, gas and electricity bills have been soaring and people on low incomes have been left wondering how to make ends meet.

While there is support available for people in this situation, it seems that many households in Germany aren’t aware that they could be eligible to apply for Wohngeld, or housing allowance, to help them with their expenses. What’s more, the amount of money people can get is set to rise at the start of next year.

Here’s what you need to know.

What exactly is Wohngeld?

Wohngeld, or housing allowance, is a form of financial aid for low-income households in Germany. It’s intended to help with the general costs associated with housing, such as monthly rents and utility bills.

Even people who own their own homes are able to get support with their mortgage repayments and building management costs (known as Hausgeld). However, they do have to fulfil certain criteria, like earning under a certain amount per month.

Unlike long-term unemployment benefit, which also includes a stipend for rent and bills, Wohngeld is intended for people who don’t rely on any other form of state support. That could include single parents or people with minimum wage jobs who spend a large proportion of their income on rent.

It means that people on jobseekers’ allowance and students with state loans and grants aren’t able to apply for Wohngeld. 

READ ALSO:

How much money can people receive?

That depends on a range of factors such as where you live, how high your rent is and how much money you earn this month. However, one thing that’s clear is that Wohngeld is likely to rise significantly at the start of next year.

On Wednesday, cabinet ministers voted through proposals from Housing Minister Klara Geywitz (SPD) to hike the monthly allowance by around €190 on average. That means that instead of receiving €177 per month, the average household on Wohngeld will receive around €370 per month starting in January. 

It’s worth noting that Geywitz’s reforms still need to clear a vote in the Bundestag, but with the governing coalition of the SPD, Greens and FDP behind the move, it’s likely that they will. 

The Housing Ministry has also put together an online tool that can calculate the amount of Wohngeld each household is entitled to. At the moment, this still calculates the allowance based on the current rates – but it will be updated if the reforms are passed by parliament. 

Who’s eligible for Wohngeld?

That depends on a complex calculation based on factors such as income, the number of people in a household, the size and location of the property and how high monthly housing expenses are. There’s no straightforward income threshold that people can refer to, which could explain why thousands of households who could potentially get Wohngeld never apply for it.

The best way to check if you’re currently eligible is to use the government’s Wohngeld calculator tool. But as we mentioned above, this is still based on the current criteria and monthly rates. 

As well as hiking the monthly allowance, Geywitz also wants to expand the criteria so more households are eligible for Wohngeld.

At the moment, around 600,000 households in Germany receive Wohngeld. This could increase by 1.4 million to two million under Geywitz’s plans. From next year, people earning minimum wage and people on low pensions are set to be among those who are able to apply. 

READ ALSO: EXPLAINED: When should I turn on my heating in Germany this year?

Sound good – where do I sign up?

In general, the states and municipalities are responsible for handling Wohngeld applications. That means you should apply at the local Wohngeldamt (housing allowance office), Wohnungsamt (housing office) or Bürgeramt (citizens’ office) in your district or city. 

If you’re unsure where to go, searching for ‘Wohngeld beantragen’ (apply for housing allowance) and the name of your city or area should pull up some search results that can guide you further. 

Apartment blocks in Berlin Marzahn.

Apartment blocks in Berlin Marzahn. Photo: picture alliance / Matthias Balk/dpa | Matthias Balk

Alongside an application form, you’ll likely have to submit a tenancy agreement, ID, information on your residence rights and proof of any income or state support you already receive. Other members of your household may also have to submit similar financial information. 

You should also be registered at the address you’re applying for Wohngeld for. 

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

Are there any other changes to Wohngeld I should know about?

Anyone already on Wohngeld, or who receives it between September and December this year, is also entitled to a special heating allowance to help with winter energy costs. This is also set to be given to students and trainees receiving a BAföG loan or grant.

For students and trainees, the heating allowance is set at €345 per person. Meanwhile, the amount given to Wohngeld recipients will vary on the size of the household.

Single-person households will receive €415, two-person households will get €540 and there will be an additional €100 per person for larger households. 

This is likely to paid out in January. 

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