German Parliament Backs Second Fuel Tax Cut to Ease Price Burden

Germany's lower house of parliament on Friday approved a second temporary fuel tax discount this year, a measure expected to cost federal and state governments €2.5 billion ($2.85 billion).

The upper house, where the states are represented, was expected to pass the fuel price discount later in the day.

Under the plan, taxes on gasoline and diesel will be reduced by €0.17 ($0.20) per litre from the start of October until the end of December. The government has turned to the relief measure to help citizens cope with fuel prices driven sharply higher by the Iran war.

With the Middle East conflict showing no sign of easing, Berlin has been compelled to revive support for consumers and companies after similar temporary steps earlier this year, as it seeks to contain public discontent and the rise of the far-right.

In April, Germany approved a fuel tax discount for May and June to cushion the impact of higher petrol prices. That measure cost €1.6 billion, and inflation eased during the two months it was in effect.