Data Analysis: Diesel fuel tax rebate never fully passed on – daily fuel price check for Germany

A recent data analysis indicates that Germany's fuel tax rebate, implemented on May 1, has not been fully passed on to consumers, leading to higher-than-expected prices at the pump. While the government reduced taxes on gasoline and diesel, the intended price reduction has been partially absorbed by fuel companies.

The analysis, based on calculations by the Ifo Institute, suggests that the combined effect of the tax rebate and lower value-added tax (VAT) should result in a price decrease of approximately 17 cents per liter. However, the actual savings for drivers have been less significant, particularly for diesel fuel.

According to the NZZ tracker, the pass-through of the rebate has consistently been weaker for diesel compared to Super E5 gasoline. Several factors may contribute to this discrepancy. Diesel is more heavily imported into Germany, meaning some fuel sold after the rebate's introduction might have been taxed at the old rate. Additionally, fuel prices fluctuate due to various market factors, including oil prices, procurement costs, and demand, making it difficult to isolate the precise impact of the tax cut.

“

Lower taxes do not automatically mean lower prices at German gas stations. The crucial factor is whether oil companies and gas stations pass on the relief.

To accurately measure the rebate's effect, the Ifo Institute compares price developments in Germany with those in France. The assumption is that German prices would have followed a similar trend to French prices without the tax rebate. The difference in price changes between the two countries helps estimate how much of the tax reduction has reached consumers at the pump.

Despite the rebate, both diesel and gasoline prices remain significantly higher than before the recent price surge, which began escalating after the start of the Iran conflict. Super E5 prices, while falling since May, are still considerably more expensive than pre-crisis levels. Diesel prices experienced a particularly sharp increase in the spring, briefly exceeding the previous record from March 2022, and while they have decreased since the rebate's introduction, the full extent of the tax reduction's impact remains unclear.

“

The pass-through of the fuel tax rebate has consistently been weaker for diesel than for Super gasoline.