Germany's lower house of parliament has approved a comprehensive relief package that includes a tax-free bonus for workers and a temporary fuel discount, aimed at cushioning the economic impact of soaring petrol prices triggered by the ongoing conflict in Iran.
Fuel Discount Measures
The approved plan introduces a two-month reduction of approximately 0.17 euros per litre on energy tax for both diesel and petrol. However, the actual effect on pump prices remains uncertain, as it depends on whether oil companies pass on the savings to consumers. The total cost of this fuel price relief is estimated at 1.6 billion euros.
Worker Bonus and Tax Incentives
Employers may offer workers a voluntary, tax-free bonus of up to 1,000 euros. This payment is tax-deductible for businesses and can be provided until June 2027. The measure is expected to cost at least 2.8 billion euros in lost tax revenue, partly offset by an increase in tobacco taxes.
Economic Reactions
Economists have criticised the broad scope of the measures, arguing that more targeted assistance for vulnerable households would be more effective. Business groups, meanwhile, have expressed concerns about the additional financial burden placed on employers during a period of economic uncertainty.
This package represents Germany's latest effort to address the energy crisis exacerbated by the Iran war, which has driven up global oil prices and strained household budgets across Europe.
