Berlin. Germany's Bundesrat Approves Parliament's "Fuel Discount" Plan
Germany slashes fuel taxes to combat soaring pump prices for two months
In a special session on Friday, the Bundesrat—Germany's upper house representing the federal states—cleared the way for the so-called fuel discount passed by the Bundestag, opting not to refer the legislation to the mediation committee.
Under the plan, energy tax rates on diesel and gasoline will be cut by 14.04 cents per liter for two months starting May 1. Factoring in the reduced VAT on the lower pre-tax price, drivers and businesses will see relief of up to 17 cents per liter at the pump. According to the governing coalition's draft bill, the measure will ease the financial burden on consumers and companies by roughly €1.6 billion.
The law aims to provide short-term relief from soaring fuel prices. The conflict in Iran has driven up energy costs, particularly crude oil, which risks dampening consumer spending. Beyond higher prices, economic growth is also being weighed down by uncertainty and declining confidence.
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