Fuel prices fall as tax cut comes in - but not everywhere in Germany

At the stroke of midnight on June 1, two new policies came into effect in Germany, designed to provide relief on public transport and at the fuel pump. While the real impact of the 9-euro ticket will only become clear in the coming days and weeks, the effect of the tax cut on fuel was apparent as soon as people woke up on Wednesday morning - although not everywhere. 

Fuel tax cut translates into cheaper prices at the pump

Experts were initially unsure whether the tax cut on petrol and diesel in Germany would actually translate into cheaper prices at the pump, but data from Wednesday morning shows that some stations have significantly reduced their prices already. 

As dpa reported, ADAC fuel price data from around 400 gas stations in Munich, Berlin and Hamburg early this morning showed that, while not all gas stations have significantly reduced their prices, the vast majority had just a few hours after the cut in taxes. 

Accordingly, on Wednesday a litre of Super E10 cost less than 1,90 euros at around 350 of the gas stations surveyed. On Tuesday, only one of these petrol stations was offering a litre of E10 for less than 2 euros, while the majority were charging between 2,10 and 2,30 euros per litre. 

The figures look broadly similar for diesel. While it was hard to come by a litre for less than 2 euros on Tuesday, by Wednesday the majority of gas stations were offering diesel at this price point. 

Since the gas stations were under no obligation to pass the tax cut onto their customers, there had been some concern that the measure would provide little relief. The President of the Ifo Institute, Clemens Duest, expressed concern to ZDF that the tax cut would purely benefit fossil fuel companies if they chose not to pass it onto their customers. 

9-euro ticket gets going across Germany

The measure has been criticised by some as encouraging people to drive and consume more fuel at a time when it should be saved as much as possible. The federal government has pointed to the fuel cut’s sister policy - the 9-euro ticket - as a counterweight to this argument, saying that it is designed to encourage people to use public transport. 

More than 7 million 9-euro tickets had already been sold prior to the scheme kicking off on Wednesday, prompting Federal Transport Minister Volker Wissing to describe it as a “success project”. 

However, it is so far unclear how the ticket will fare in the long-term, with passenger representative associations expressing fears that popular tourist routes will be overloaded and chaotic, particularly over the summer holidays and on national holidays like the upcoming Whit Monday.