Germany's Bundestag passes fuel tax cut bill aimed at easing pressure from soaring oil prices

(Deutsche Welle Chinese website) The German grand coalition government has proposed a bill to reduce the energy tax on diesel and gasoline by 14 euro cents per liter from October to the end of December this year. After taking into account the corresponding reduction in value-added tax, the total tax reduction per liter of fuel is 17 euro cents.

In a registered vote held in the German Bundestag on Friday (September 25), 434 of the 562 members voted in favor of the bill, while 128 voted against it. The bill has now been submitted to the Bundesrat for a vote through fast-track procedures to ensure that the subsidy can take effect on October 1.

The overall bailout package is approximately 2.5 billion euros

The package will result in a loss of 2.5 billion euros in tax revenue for the state. The resulting burden will be shared between the federal and state governments. In order to cushion the impact of soaring oil prices caused by the Iran war, Germany implemented a two-month "fuel discount" in the spring.

Stefan Korbach, a fiscal policy expert of the Christian Democratic Union, said that high fuel prices have placed a heavy burden on ordinary families and businesses. Fuel subsidies are "the best means that can be implemented quickly at the moment" and can produce "immediate results" and help curb inflation. He also pointed out that although this measure is only a "stopgap measure" and cannot eradicate the problem, it is still the best available means for the current situation.

During the parliamentary debate, Armand Zorn, deputy chairman of the Social Democratic Party's parliamentary group, said that all parties had "difficult discussions" on the draft, but in view of the sharp surge in diesel and gasoline prices, the decision to implement the "fuel discount" will provide immediate relief to people's daily lives. The ruling coalition also agreed on a "fuel price cap" aimed at limiting the room for oil companies to raise prices.

Greens: 'Ridiculous solution'

Opposition parties including the Greens, Left Party and Alternative for Germany sharply criticized the bill. Katharina Dröge, chair of the Green Party's parliamentary group, described the temporary tax cuts as a "ridiculous solution". She pointed out that the previous "fuel discounts" introduced in May and June had not fully benefited consumers, and the cost of this measure was equivalent to the total of all household benefit cuts in the federal budget in one year.

Experts criticized the measure's lack of fuel-saving incentives

Previously, a number of environmental and social organizations have expressed criticism of this fuel bailout measure. Claudia Kemfert, an economist at the German Institute for Economic Research (DIW), called this the wrong response to high energy prices, noting that the measure was poorly targeted, costly and failed to encourage people to save fuel. Kenfetter believes this effectively subsidizes dependence on fossil fuels and is "a step in the wrong direction" for climate protection.