German coalition announces fuel price relief worth $1.9 billion

Monday 13 April 2026 - 09:15

Germany’s governing coalition has announced a major fuel price relief package worth around €1.6 billion ($1.9 billion), aiming to ease pressure on households and businesses affected by rising energy costs.

The decision comes after a sharp increase in global oil prices, which has been linked to ongoing geopolitical tensions and disruptions in international energy supply chains. Authorities say the measure is designed to provide temporary financial relief during a period of market instability.

Under the plan, the energy tax on diesel and petrol will be reduced by approximately €0.17 per litre for a period of two months. The initiative was agreed jointly by Germany’s main governing parties, including the Christian Democratic Union (CDU) and the Social Democratic Party (SPD).

The coalition emphasized that the measure is intended to support both consumers and companies facing higher transport and production costs. Additional economic support measures were also agreed, including a tax-free bonus of up to €1,000 per employee, aimed at encouraging employers to provide extra financial assistance without additional payroll or social security charges.

German Chancellor Friedrich Merz stated that the government is working to mitigate the economic impact of global instability, highlighting the importance of protecting citizens from energy-driven inflation.

Officials linked the price surge partly to tensions surrounding the Iran conflict, which has disrupted global energy flows and increased uncertainty in oil markets. The situation has added further strain to European economies already facing inflationary pressures.

The coalition government reaffirmed its commitment to stabilizing energy costs while maintaining fiscal responsibility, as Germany continues to navigate a challenging international economic environment.