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Price of fuel falls in Germany after tax cut

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DPA/The Local - [email protected]
Price of fuel falls in Germany after tax cut
Prices of fuel at a petrol station at Frankfurt an der Oder early on Wednesday morning. Photo: picture alliance/dpa | Patrick Pleul

The price of petrol in Germany has fallen at several gas stations much faster than expected after a fuel tax cut came into force.

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The fuel tax reduction has been in effect since midnight - and it has led to significantly lower prices at many petrol stations across Germany.

Press agency DPA evaluated the prices at 400 petrol stations in Munich, Berlin and Hamburg between 6am and 7am on Wednesday, with the help of data from Germany's biggest car club, the ADAC.

Although not all petrol stations lowered their prices significantly, the vast majority showed a clear difference just a few hours after the tax cut, DPA said. 

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The Federal Association of Independent Petrol Stations (Bundesverband freier Tankstellen) also said initial evidence seemed to show that the tax cut was being passed onto consumers.

"At first glance, the measure seems to have been widely passed on," the association's managing director, Stephan Zieger said.

The government has slashed taxes on fuel for three months as part of a package of measures aimed at relieving people in Germany of high energy costs. Like the €9 ticket for public transport users, the tax cut on fuel will run from June 1st to August 31st before returning to normal in September. 

However, there have been fears that oil companies will not pass on the tax cut.

READ ALSO: Why are fuel prices soaring in Germany this week?

A driver in Oldenburg filling up his tank with  Super E10 shortly after midnight on Wednesday

A driver in Oldenburg filling up his tank with Super E10 shortly after midnight on Wednesday. Photo: picture alliance/dpa | Hauke-Christian Dittrich

Yet DPA's flash analysis of prices found that a litre of Super E10 cost less than €1.90 at around 350 of the petrol stations surveyed on Wednesday morning.

In the same period on Tuesday, only one petrol station in the survey offered E10 for less than €2. At the majority of stations, the price was between €2.10 and €2.30 per litre at that time.

The price difference for premium petrol due to the tax relief is - theoretically - 35 cents per litre. This is within the range of reductions seen so far, however, it's still too early to say how things will go. 

There was also a clear trend towards falling prices of diesel. While on Tuesday morning the fuel was rarely available for less than €2 per litre, on Wednesday this was the case.

For diesel, the relief from the tax cut is significantly lower at just under 17 cents per litre.

Before the tax cut, it had been expected that fuel prices would not fall straight away. That's because the lowered tax does not apply to sales at the pump, but from the tank farm or refinery.

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This means that all supplies delivered to the petrol stations before midnight can still be charged at the normal, higher tax rate. The fact that the majority of petrol stations have nevertheless already lowered their prices considerably could be a consequence of the high level of public attention and the resulting competitive pressure.

The Association of Independent Petrol Stations explained that the challenge is to get the lower-taxed fuel from the refineries and storage facilities to the petrol stations quickly. 

Vocabulary

Fuel tax - (die) Spritsteuer

Fuel prices (die) Spritpreisen 

Tax reduction/cut - (die) Steuersenkung

Filling station - (die) Tankstelle

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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