Germany considers windfall tax amid rising fuel prices

"Fuel prices have been rising sharply since just before the war on Iran began at the end of February. According to the General German Automobile Club's data, diesel has increased by 42 eurocents (about 48 US cents) per liter (0.264 gallons), while E10 petrol has risen by nearly 27 cents."

"Reiche told the Bundestag that what Germany does not need "20 days after the war" is "activism," stressing the government is acting in a measured way. She said calls for a fuel price cap, discounts, or a windfall tax are being considered, but that they must be weighed against costs and benefits."

"The coalition has introduced a fuel pricing package requiring gas stations to raise prices only once daily at noon, while allowing reductions at any time, alongside tighter antitrust rules. The Bundestag is preparing to pass the package under an expedited procedure."

German fuel prices have increased significantly following the US-Israeli conflict with Iran in late February. Diesel prices rose 42 eurocents per liter while E10 petrol increased nearly 27 cents, driven by supply pressures from Iran's control of the Strait of Hormuz and attacks on fuel infrastructure. Economy Minister Katherina Reiche cautioned against hasty relief measures, emphasizing measured government action. The coalition introduced a fuel pricing package requiring gas stations to raise prices only once daily at noon while allowing immediate reductions, alongside stricter antitrust enforcement. Proposals for price caps, discounts, and windfall taxes are under consideration but require careful cost-benefit analysis. The Bundestag plans expedited passage next week, with Bundesrat review the following Friday.

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