German Tax Cut On Petrol And Diesel Eases Prices At The Pump

BERLIN, May 1 (Bernama-dpa) -- Prices at the fuel pump dropped across parts of Germany on Friday as a tax cut came into effect, reported German Press Agency (dpa).

German lawmakers approved the tax cut last month, as part of measures to ease the burden on consumers of higher costs due to the Iran conflict. The tax cut is set to last until the end of June.

Oil prices have risen sharply because of the blockade of the Strait of Hormuz off the Iranian coast, which is crucial for the global oil trade.

The German automobile association (ADAC)'s petrol station app showed prices below €2 (US$2.35) in many places early on Friday, especially for E10 and in some cases for diesel. 

In Munich, E10 cost significantly less than €2 at most of the displayed petrol stations, with some below €1.90 (US$2.22) per litre. For diesel, the €2 mark was undercut in more than half of the cases. 

In Berlin, E10 was cheaper than €2 at the vast majority of the displayed petrol stations. This was rarely the case for diesel.

In Hamburg, E10 was cheaper than €2 at more than half of the displayed petrol stations, with some below €1.90. However, diesel generally remained more expensive than €2. 

Super E10 is the term used for petrol that contains at most 10 per cent bioethanol by volume in addition to fossil petrol.

Bioethanol is alcohol obtained primarily from plant-based feedstocks. Since its introduction in Europe in 2011, Super E10 petrol has become available in a growing number of European countries. 

It is not yet clear whether the full tax rebate of about €0.17 (US$0.20) will be passed on to consumers.

Experts expect the rebate to appear at the pumps gradually.

One reason for this is that the tax benefit only applies to fuel that is left at tank farms or refineries after midnight, not to the stocks already held by petrol stations.

-- BERNAMA-dpa