Berlin agrees 17 cents off your fuel from 1 October
The federal government and the states have agreed on a package to bring down fuel prices, after diesel reached an all-time high of 2.471 euros a litre. The plan cuts the energy tax on petrol and diesel by 14 cents a litre until the end of 2026. Once lower value-added tax is counted, the price at the pump should fall by about 17 cents a litre.
The relief is worth roughly 2.5 billion euros to households and businesses together. The federal government and the states are splitting the cost, with the states contributing 1.25 billion euros through a fixed value-added tax amount. The government is aiming to have the measure in place by 1 October.
A second measure follows. The government plans a temporary cap on the price of petrol and diesel, set against oil prices, transport and distribution costs and a dealer margin. Luxembourg and Belgium were named as models. No start date has been fixed, but it is due no later than 1 January 2027.
If you drive to work, run a delivery round or depend on a car for care duties, this is the first direct relief since the last fuel tax cut, which ran from early May to the end of June. That earlier cut was the same size, about 17 cents, and cost the federal budget around 1.6 billion euros. How much of it reached drivers was disputed at the time, and the same question applies now: the tax falls, but the pump price also depends on oil markets and on what fuel companies pass on.
Nothing is in force yet. This is an agreement in principle between the coalition partners and the states, and it still needs the formal approval of the states and of the coalition groups in the Bundestag. Until that happens, the 1 October date is a target rather than a guarantee. There is nothing to apply for and no form to fill in: if it passes, the reduction appears in the price at the pump automatically. Watch for confirmation in the last week of September.