Germany considers temporary VAT cut on fuel to ease pump prices

The German government is considering a temporary cut to the value-added tax on fuel from 19% to 7% to ease high pump prices, Economics Minister Katherina Reiche said Wednesday.
Reiche, speaking in Houston during a G20 energy ministers’ meeting, called the measure “a sensible approach” that would deliver immediate relief “directly at the pump.” She noted that a similar temporary reduction in the energy tax earlier this year had already been implemented .
Unionsfraktionschef Thorsten Frei also backed the VAT reduction, telling ARD’s “Maischberger” program that swift coalition action could see the measure take effect by Oct. 1. Frei cited the earlier “Tankrabatt” energy tax cut as precedent and said the government must weigh duration and targeting of any relief .
Chancellor Friedrich Merz had pledged on Tuesday to propose relief measures soon, as rising fuel prices—driven by Middle East supply disruptions—squeezed households and logistics firms. Reiche ruled out price caps or windfall taxes, arguing they would harm refiners or create legal uncertainty .
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