Greenpeace slams German fuel tax cuts as new measures take effect

Greenpeace has strongly criticized a fuel tax cut that took effect in Germany on Friday, arguing the measure is too expensive and will boost revenue for oil companies, while consumers continue to struggle with high energy prices caused by the Iran war.

Greenpeace mobility expert Marissa Reiserer called for the €0.17 ($0.19) tax cut per litre of petrol and diesel to be reversed as "quickly as possible."

She described the cap as a step in the wrong direction as it is likely to line the pockets of oil companies and benefit commuters with "gas-guzzling cars."

Instead, Reiserer urged for fuel consumption to be brought down permanently, arguing that this could be achieved by improving public transport and boosting electric vehicles.

The tax cut, which took effect at midnight, was approved by German lawmakers last month, as part of measures to ease the burden on consumers due to the Iran war. The cap is set to last until the end of June.

It is not yet clear whether the full tax rebate of about €0.17 will be passed on to consumers. Experts expect the rebate to appear at the pumps gradually. One reason for this is that the tax benefit only applies to fuel that left tank farms or refineries after midnight, not to the stocks already held by petrol stations.

Oil prices have risen sharply because of the blockade of the Strait of Hormuz off the Iranian coast, which is crucial for the global oil trade. This has caused prices at the pump to surge across the world, reaching record highs in Germany last month.

Chancellor Friedrich Merz's government subsequently passed a law to ban petrol stations from raising prices more than once a day, but the restrictions failed to bring down prices.

On the first day of the new measures on Friday, the German automobile association ADAC's petrol station app showed prices below €2 in many places early on Friday, especially for E10 and in some cases for diesel. 

A similar temporary cap was introduced in Germany following the start of Russia's full-scale invasion of Ukraine, though the government at the time, which included the Green Party, also introduced a monthly €9 rail pass that could be used on local transport nationwide, in a bid to incentivize motorists to switch to public transport.

The pass garnered widespread attention and popularity even beyond Germany.

Reiserer criticized the current conservative-led government for opting against reviving the concept, and instead returning to a fuel tax cut that she said had failed before.

She also pointed to the current Deutschlandticket rail pass, which applies on the same routes as the €9 pass but, at €63 a month, is considerably more expensive.

The ticket helps to bring down car trips, eases the burden on roads and consumers, supports the climate and helps to make Germany less dependable on oil imports, according to the expert.

Armand Zorn, a senior lawmaker from the Social Democrats, which are the junior partner in Merz's coalition, called on oil companies to pass on the tax cuts to consumers and bring down prices at the pump accordingly.

"This rip-off must stop, and quickly," he said, adding that the temporary tax cut lays the groundwork for providing targeted relief to commuters and businesses.