German fuel prices approach pre-war levels as discount nears end

German fuel prices are rapidly approaching their pre-Iran war levels, offering some relief to consumers. On Monday, a liter of diesel averaged 1.816 euros nationwide, a slight decrease of 1.3 cents from the previous day, marking the seventh consecutive day of falling prices. Super E10 gasoline also saw a reduction, dropping by 0.9 cents to 1.868 euros per liter. This means diesel is now only seven cents more expensive per liter than on the last day before the conflict began, with E10 being nine cents more. For a 50-liter tank, this translates to a difference of 3.50 euros for diesel and 4.50 euros for E10 compared to pre-war prices.

At their peak, diesel prices had surged by over 70 cents per liter, and E10 by more than 40 cents. Recent data from Tuesday morning suggests prices may continue to fall, although daily averages can fluctuate. The trend of lower prices in the morning and evening, with a midday spike, has become common since the introduction of the 12-hour pricing rule. The recent decline in oil prices, partly due to easing tensions in the Middle East, is a significant factor. However, the ADAC (General German Automobile Club) has noted that these lower oil prices are not being passed on to consumers quickly enough.

The government's fuel discount, which reduces taxes by 16.7 cents per liter, has also contributed to the price drop. This discount is scheduled to end in two weeks and is not expected to be extended, raising concerns about future price hikes. The Monopolkommission, an independent advisory body to the German government, estimates that between 15 and 16 cents of the 16.7-cent tax reduction per liter have been passed on to consumers, depending on the fuel type. This suggests that 100 to 200 million euros of the total 1.6 billion euro tax cut may not have reached consumers.

Experts from the Monopolkommission compared fuel prices in Germany and France for their analysis, conservatively estimating the price gap. The Ifo Institute in Munich also anticipates an incomplete pass-through of the discount, particularly for diesel, indicating that a portion of the 1.6 billion euros spent on the fuel discount has not benefited consumers.