Germany to Cut Fuel Tax to Cushion Impact of Iran War
The German government coalition has announced €1.6bn ($1.7bn) in fuel price relief for consumers and businesses in response to rising oil prices driven by the war with Iran.
According to a joint document by the conservative CDU and the Social Democratic Party (SPD), the government will reduce the energy tax on petrol and diesel by around €0.17 per litre for a period of two months.
The conflict has caused severe disruption to global energy supplies, with oil prices rising sharply. The situation has been further exacerbated by planned US measures, including a blockade of Iranian ports and coastal areas.
Chancellor Friedrich Merz said at a press conference that the government was doing everything possible to mitigate the impact of the conflict, which is currently paused under a fragile ceasefire.
The coalition partners also agreed that companies will be allowed to grant employees a one-off bonus of €1,000 ($1,080), exempt from taxes and social contributions.