BERLIN, GERMANY / RankWire.AI / – Germany has announced a temporary reduction in fuel taxes aimed at easing the financial burden on petrol and diesel consumers during the last quarter of 2026. The federal government, along with state authorities, agreed on a 14-cent-per-litre decrease in the energy tax. Additionally, a lowered value-added tax would push the total tax cut to approximately 17 cents per litre. This draft legislation is set to begin on Oct. 1 and conclude on Dec. 31.
The package totals around €2.5 billion in combined relief for both drivers and commercial entities purchasing road fuel. Germany’s federal states are expected to contribute €1.25 billion through a fixed share of VAT revenue. While the cabinet has approved the draft legislation, it still needs approval from the parliament. Both the Bundestag and Bundesrat must pass the bill before the temporary tax reduction can be implemented, following the timeline outlined by the government.
Earlier in 2026, Germany enacted a similar fuel tax relief as part of a temporary support scheme. From May 1 through June 30, the government lowered the energy tax on petrol and diesel by 14.04 cents per litre. The VAT adjustment increased the overall tax reduction to roughly 17 cents per litre. That measure concluded on June 30 after two months of reduced fuel taxes at stations nationwide.
Relief measure for fuel taxes echoes previous initiative
Federal Cartel Office and the Independent Monopolies Commission later evaluated how the earlier reduction influenced retail prices. Their assessments indicated that fuel retailers mainly transferred the tax savings to consumers. The previous program caused estimated tax revenue losses of about €1.6 billion. The new package employs the same general tax reduction approach but extends it to three months instead of two, applying to both petrol and diesel during the relief period.
In the latest draft, the energy tax would be cut by 14 cents per litre of petrol or diesel sold. VAT would decrease as well, since it applies to a smaller taxable amount. Combining these changes results in a total tax relief of roughly 17 cents per litre. However, retail fuel prices can still differ between stations due to wholesale fuel costs, transportation expenses, and individual pricing strategies.
Approval from parliament still needed
The German federal government has designated Oct. 1 as the intended start date for the measure. As of Sept. 22, however, parliamentary approval has not been finalized. The final legislative steps lie with the Bundestag and Bundesrat. The measure currently exists as an approved government draft rather than a law in force. Its duration, tax rates, and financing details are already outlined in the proposal progressing through the legislative process.
The plan is scheduled to run until Dec. 31, covering the last three months of 2026. It proposes a 14-cent reduction in the energy tax and an overall relief of about 17 cents per litre after VAT considerations. The total package is valued at approximately €2.5 billion, including the €1.25 billion contribution from Germany’s states. This initiative mirrors the structure of the temporary fuel-tax reduction implemented during May and June.