Germany plans to cut fuel taxes — The Local Germany
Germany’s coalition government has reached an agreement to reduce taxes on automotive fuel amid a sharp rise in prices linked to the war in the Middle East. The Local Germany reports, citing sources close to the government.
Tax measure until the end of the year
According to the sources, the proposed tax cut will remain in effect until the end of the year. After that, a price cap on fuel sales is expected to take effect. The available text provides no information on the size of the tax cut or the level of the price limit.
German Chancellor Friedrich Merz on Tuesday promised to propose a solution for motorists in the near future. Different ministers had put forward different options for responding to the fuel price situation.
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Oil supplies and political pressure
The source links the price increase to the war in which the United States and Israel have been confronting Iran for six months. According to AFP, Tehran has restricted traffic through the Strait of Hormuz, holding back oil exports from Persian Gulf countries.
The situation was complicated, according to the source, by attacks by Iran-backed Yemeni Houthis on an alternative export route through the Bab el-Mandeb Strait. Bloomberg reported that Saudi Aramco warned at least two European oil refineries that they would not receive oil supplies next month.
Merz is also under political pressure following elections in the state of Saxony-Anhalt, where the far-right AfD won a decisive victory over his centre-right Christian Democratic Union. Elections are due to take place in two more German states on Sunday.
