“Not very precise”: Fuel discount does not fully reach motorists

The federal government is trying to reduce high fuel prices for the third time. The fuel discount brings a tax reduction on fuel. But these are not passed on in full, according to a study by the Ifo Institute.

The Ifo Institute has so far only seen a partial pass-on of the tax discount when it comes to fuel discounts. "For diesel, the gas stations passed on an average of 15 cents of the 17 cent tax cut per liter in the first five days. For premium gasoline E5 it was an average of a good 16 cents and for Super E10 15 cents," says Ifo expert Florian Neumeier.

How well the discount is passed on varies: “On October 1st, the discount was passed on in full, while the pass-on over the weekend remained incomplete,” says Neumeier. There is a lot of movement, especially with premium gasoline of the cheapest grade E10. The calculated pass-on there drops by around 7 cents from Thursday to Sunday. On Monday - the current investigation continues until then - there will again be a widespread passing on of more than 15 cents. For diesel, the curve is similar - albeit with smaller downward and upward swings.

The basis of the estimate calculated by Ifo is a comparison of prices in Germany with prices abroad. This is intended to compensate for the usual general fluctuations in fuel prices - including those caused by the price of oil.

The federal government forgoes tax revenue

The fuel discount has been valid since October 1st. The federal government waives energy and VAT of 16.7 cents per liter. Like many economists, Neumeier sees the measure critically. Among other things, because the dampening effect of high prices also reduces consumption. The discount also distorts purchasing decisions: anyone who buys a gasoline engine becomes dependent on the Gulf region. The price should also show that.

“The fuel discount is also not very targeted,” emphasizes his Ifo colleague Christian Gréus. “Households with low incomes, small cars and low mileage hardly benefit from this relief package.”

Like with the first fuel discount, the Ifo wants to put a tracker online for playback. In May and June, economic researchers came to the conclusion that the discount was not fully passed on.

The Fuels and Energy trade association (en2x) has always contradicted this. On Monday it said: "Without the fuel discount, gas station prices at their stations would have been 17 cents per liter higher at any time since the beginning of October." However, no statement can be made about the overall German market of around 14,000 gas stations. The en2x members represent about half of them.