The German Bundestag has approved a temporary fuel tax reduction and a one-time relief payment to help ease the burden of rising gasoline and diesel prices linked to the ongoing Iran conflict.
On Friday, April 24, 2026, lawmakers voted to cut the energy tax on gasoline and diesel by 17 cents per liter for two months, effective May 1 through June 30. The Bundesrat also approved the measure in a special session later that day, clearing the way for the tax cut to take effect at the start of next month.
In addition to the fuel tax reduction, the Bundestag passed a separate measure allowing employers to pay their employees a tax- and social security-free bonus of up to 1,000 euros. Payments can be made anytime before June 30, 2027, giving companies flexibility amid current economic challenges.
Chancellor Friedrich Merz said the combined measures would quickly improve conditions for drivers and businesses, particularly those who rely heavily on vehicles for function. He emphasized that the tax cut would be passed directly to consumers at the pump.
Finance Minister Lars Klingbeil urged fuel companies to fully pass on the savings to customers, warning that while the cartel office cannot force compliance under competition law, it expects the industry to honor the commitment. Industry representatives have pledged to pass along the full tax reduction, though they noted that other market factors could influence final pump prices.
The relief package comes after earlier efforts—including limits on daily price increases and expanded authority for the Federal Cartel Office—failed to significantly curb fuel costs. Officials said the new approach directly targets the tax component of fuel prices to deliver faster relief.
The government estimates the two-month fuel tax cut will cost approximately 1.6 billion euros in lost revenue.
