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DRIVING

Germany sees ‘highest fuel prices on record’ in 2022

Drivers in Germany have paid more at the pump than ever before this year, according to data from motorists' association ADAC. Here's what you need to know about the soaring prices - and when they could change.

Fuel prices in Hamburg
Prices for diesel and petrol on display at a petrol station in Hamburg. Photo: picture alliance/dpa | Daniel Bockwoldt

What’s going on?

Drivers in Germany have had a record-breaking year this year – and not in a good way. Skyrocketing fuel prices have seen 2022 take the top spot as the most expensive year to ever refill your tank, according to data compiled by motorists’ association ADAC. 

Even if petrol and diesel were to be given away for free until the end of year, 2022 would still remain the priciest year on record. And if prices at the pump remain roughly the same as they are now, the previous record for fuel prices will be completely “pulverised”, ADAC revealed. 

In 2012 – the previous most expensive year on record – E10 cost an annual average of €1.589 per litre, while diesel was €1.478. This year, there has not yet been a single day on which either type of fuel was cheaper on a national level. 

For E10, the annual average price is estimated to be around €1.88 per litre – around 29 cents higher than the average in 2012. For diesel, with an expected current annual average of €1.98 per litre, 2012’s average prices would be exceeded by about 50 cents.  

Following Russia’s invasion of Ukraine, fuel prices reached a dizzying peak of €2.30 per litre of diesel and €2.20 per litre of petrol. The prices have since dampened slightly and were much lower over summer due the government’s three-month cap on energy taxes. 

However, even billion-euro tax cuts haven’t been enough to compensate for the huge spike in prices on the energy markets. 

READ ALSO: German petrol costs rise sharply after tax cut ends

How is this affecting people’s budgets?

How expensive the higher tank prices will be for consumers depends on their vehicle type and driving behaviour.

Based on the ADAC’s projections for 2022 as a whole, as well as typical vehicle types and mileages, motorists would have had to pay hundreds of euros more this year than any time in the previous decade. 

For a diesel vehicle with an annual mileage of around 20,000 kilometres and a consumption of six litres per 100 kilometres, the costs will rise by around €860 per year, according to the ADAC forecasts. Petrol-driven cars generally cover shorter distances, but consume more.

Assuming a mileage of 10,500 kilometres per year and a consumption of 7.5 litres per 100 kilometres, the additional costs would be around €360.

To compensate for the price hikes, drivers appear to be making a switch to the slightly cheaper E10 petrol. In the first seven months of the year, the share of vehicles running on E10 was 22.8 percent, compared to only 15.8 percent over the same period in 2021.

According to the ADAC, making the switch shouldn’t be harmful to most petrol cars. 

“Almost all petrol engines can tolerate it, unless they are vintage cars,” ADAC’s Christian Laberer told DPA. “The price difference is usually five to six cents. Nevertheless, many more people still fill up with normal Super than E10.”

READ ALSO: REVEALED: The key traffic violations and fines to know about in Germany

Will the prices go down again next year?

With the outlook for the energy market still uncertain, ADAC doesn’t expect prices to drop significantly in the near future.

“There is a danger that the high prices will become entrenched in the market for a longer period of time,” Laberer explained. 

However, there could be some good news on the horizon for petrol car owners, he added.

That’s because petrol stations are once again competing for customers by lowering their prices slightly, which means petrol prices are far more closely linked to the actual price of oil than they have been at any point since the start of the Ukraine war. 

Fuel prices on display in Potsdam

Fuel prices on display in Potsdam, Brandenburg. Photo: picture alliance/dpa | Soeren Stache

For diesel, however, the outlook is much less rosy. According to Laberer, industry has partially responded to the energy crisis by replacing gas with diesel, which has driven up demand, and demand for the very similar heating oil is also rising again.

“But this does not justify how much the current prices are inflated,” Laberer emphasised.

READ ALSO: What to do if you get a parking ticket in Germany

Is the government doing anything to help?

Following the fuel tax cut over summer, another bit of tax relief should be coming for drivers in the coming months. 

Back in spring, the government agreed to increase the so-called commuters’ allowance for the 2022 tax year, meaning people who drive to their place of work should be able to write off even more from their taxes. 

Currently, the tax office recognises a flat-rate commuting allowance of 30 cents per working day for each kilometre of one-way travel. From the 21st kilometre onwards, the allowance goes up to 35 cents per kilometre. For 2022’s tax return, the traffic light coalition has increased the flat rate for long-distance commuters – i.e. for those who have to travel 21 or more kilometres to work – to 38 cents per kilometre.

Early next year, the traffic-light coalition also wants to launch a new transport ticket to ensure more affordable mobility for people in Germany. The so-called Deutschlandticket will cost €49 per month and can be used on local and regional transport anywhere in Germany. 

READ ALSO: ‘Deutschlandticket’: What you need to know about Germany’s new €49 ticket

Nevertheless, ADAC says the government needs to do more to support drivers and is calling for another rise in the commuters’ allowance – this time for short-distance as well as long-distance commuters.

This Monday, the Bundestag finance committee is due to discuss proposed changes to the 2022 tax law, including the plans to increase the long-distance commuters’ allowance to 38 cents per kilometre. 

“The draft of the annual tax law should be supplemented in the Bundestag deliberations with an increased commuting allowance from the first kilometre,” said ADAC transport president Gerhard Hillebrand. “Not only have the energy costs in transport risen massively, but the prices for new and used vehicles have also gone up as well.”

That means commuters are particularly affected by rising costs and must be supported even more than before, he added. 

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ENERGY

REVEALED: Germany’s planned hardship fund to help with energy bills

The gas and electricity price caps are coming, and the government wants to pay people's energy bills in December - but will that be enough to stop people falling into hardship? Germany's Economics Ministry thinks it won't be and has drafted plans for a new hardship fund. Here's what you need to know.

REVEALED: Germany's planned hardship fund to help with energy bills

When Germany’s traffic light coalition parties – the SPD, Greens and FDP – took office last December, they had no idea that they would be facing an energy crisis on such a major scale.

But with Russia’s invasion of Ukraine sending the gas market into turmoil, the coalition’s big plans have been put on the backburner as they work out how best to support people with rising costs. 

Under the latest set of energy relief measures put forward by the Gas Price Commission, the government will shoulder the cost of people’s energy bills this December. It also plans to introduce a cap on both electricity and gas prices, which will come into force next March and be backdated to January.

READ ALSO: Germany plans to cap energy prices from start of 2023

This multi-billion relief package is likely to soften the blow for many households, but according to a new government document obtained by Bild, ministers are concerned that it won’t be enough to stop many people – and businesses – falling into financial hardship.

To ensure this doesn’t happen, federal and state economists ministers want to set aside billions more for additional aid. 

Here’s who can get hold of the extra cash – and how.

Renters and private home owners

People who rent an apartment in Germany and home owners who live in their properties can access additional help from the state if they can prove they’re over-burdened by their heating and energy costs.

That could be due to an eye-wateringly high back-payment for energy bills demanded by the landlord or due to the fact that they have to purchase expensive fuel such as wood pellets for heating. 

More specifically, people claiming unemployment benefits such as Bürgergeld can get some extra cash from the Jobcenter after their bills are calculated by the landlord. If they’re facing a hefty back-payment, or Nachzahlung, they can get up to three months of Bürgergeld retroactively to help cover the costs. 

In addition, someone who wants to claim Bürgergeld for a single month will be spared from having to prove the amount of money they have in the bank. Under the ordinary rules for Bürgergeld claimants, job seekers must have less than €40,000 in savings.

According to the government’s calculations, this emergency buffer is set to cost around €500 million. Claims for additional support will be handled by the job centres or social offices.

Small- and medium-sized businesses (SMEs)

Small business owners have been among the hardest hit by the energy crisis – but luckily help may be on its way. 

In the document obtained by Bild, ministers say they assume that the gas and electricity price cap will be an adequate level of support for most SMEs. Nevertheless, there could be a few circumstances in which business owners slip through the net:

  • Business owners may already be facing huge hikes in their energy bills before the price caps come into force, for example in the form of a big back-payment for energy costs over several months, or
  • Businesses may find that, due to exceptional circumstances, they’re still unable to pay their bills – even after the price caps are introduced. 

In these two scenarios, SMEs can apply for extra support from the government. 

To be eligible, businesses must either show that their energy costs quadrupled at least three months between January and November 2022, or they’ll have to show that their energy costs have also multiplied in spite of the energy price cap and that their business is highly energy-intensive or costly.

The government expects this support package to cost around €1 billion and says that the details will be worked out after state premiers agree to the proposals.  

READ ALSO: How electricity prices are rising across Germany

Housing companies 

Large landlords could also be in line for some additional government aid under the ministers’ plans. Due to the way the current rental system works, many are paying high bills for heating and energy that they’re not yet able to recoup from tenants in the end-of-year bill.

Housing complexes in Berlin.

Housing complexes in Berlin. Photo: picture alliance/dpa | Monika Skolimowska

To help housing companies that are in this situation, the government wants to offer loans that could help tide them over. Twenty percent of this credit would be secured by the federal states, and the measure is expected to cost around €1.1 billion. 

Hospitals and care homes  

Care facilities and clinics face exorbitant energy bills – even in ordinary times – so this group of institutions will also be given financial aid, the draft said.

This will come in the form of a one-off support payment and ongoing support with gas and electricity bills. Hospitals and care homes will in many cases get their additional costs for energy completely refunded by the state until April 2024. Social agencies and social service providers will also be given subsidies and financial aid to help deal with their increased overheads. 

In addition, cultural sites and facilities like museums and art galleries will get subsidies intended to flatten out the rise in energy costs. In most cases, the energy price cap only applies to 80 percent of a business’ ordinary consumption, but this limit will be dispensed with for cultural institutions. 

However, the government says it still wants to incentive energy-saving measures as well as offering financial support. 

READ ALSO: When will people in Germany get their December gas bill payout?

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