Austrian government wants to cut fuel tax

Austria’s governing coalition plans to temporarily cut taxes on petrol and diesel and cap fuel retailers’ margins, in a bid to offset rising oil prices linked to the conflict involving Iran.

Tensions in the Middle East, including attacks on Iran by Israel and the United States and Tehran’s subsequent response, have disrupted oil flows through the Strait of Hormuz, a route that accounts for roughly a fifth of global supply. Energy prices have risen as a result, prompting European governments to act.

The Chancellor, Christian Stocker, said the measures are intended to curb inflation, stabilise fuel prices and maintain economic competitiveness. The government plans to reduce fuel tax by about five cents per litre and introduce controls on margins across the supply chain. Prices could fall by around ten cents per litre.

The proposals still require parliamentary approval and are expected to take effect by the end of the year. The margin cap would be triggered if profits rise significantly above pre-crisis levels.

(reuters, lud)