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FAQ: How the tank discount should work

FAQ: How the tank discount should work
Written by insideindyhomes


FAQ

Status: 05/13/2022 5:32 p.m

From June 1, the federal government wants to lower the energy tax on fuel prices and thus relieve drivers. Today the Bundestag discussed the issue. The answers to some questions.

By Till Bücker, tagesschau.de

As a reaction to the high fuel prices, the federal government also wants to relieve drivers in Germany with its relief package. For the first time today, the Bundestag discussed the traffic light coalition’s plan to reduce energy taxes for a limited period.


Where are the fuel prices at the moment?

Since the beginning of the Ukraine war, the prices at gas stations in this country have experienced drastic fluctuations and at times were more expensive than ever. By mid-March, Super E10 had increased in price by around 45 cents per liter to as much as 2.19 euros, according to ADAC information. For a liter of diesel, drivers even had to pay 2.29 euros, around 65 cents more.

In other words: With a tank filling of 50 liters of Super E10, that meant a price increase of almost 23 euros, and diesel over 32 euros. Since these highs, petrol and diesel have given up around half of their growth by mid-April – but a sustained decline does not seem to be in sight.

According to the ADAC, a liter of Super E10 now costs more than two euros on average nationwide – and the trend is rising. Drivers currently have to pay an average of 2.029 euros for a liter of diesel. According to data from the EU Commission, nowhere in the EU have fuel prices risen more than in Germany since the Russian attack. They are still well above the previous year’s level.

What is the fuel discount?

According to the federal government’s plans, the energy tax is to be reduced to the European minimum for three months from June 1st. According to calculations by the SPD, Greens and FDP, this would make petrol 29.55 cents cheaper per liter. With a liter of diesel, drivers would save at least 14.04 cents. Extrapolated, that would be almost 15 euros for 50 liters or seven euros per tank filling.

What is the fuel price made up of?

The prices at the gas station are made up of several components. On the one hand, market forces determine how deep drivers have to dig into their pockets. An important factor is the purchase price of petrol and diesel, which depends on raw material prices and thus also on the economy or the political situation. The dollar rate is also important: since oil is traded almost exclusively in US currency around the world, prices at the pump go up when the rate rises against the euro.

In addition, there is the coverage amount, which includes the costs for transport, storage or further processing as well as the profit of the mineral oil companies. It also includes the CO2 tax, which was increased again at the beginning of the year. The competition between gas station operators such as Aral, Shell and Jet also plays a role.

On the other hand, a large part of the fuel prices goes to the state: According to the ADAC, around 48 percent of the petrol bill ends up in the public purse, and around 39 percent for diesel. The energy tax is currently 65.45 cents for a liter of petrol and 47.04 cents for a liter of diesel. In addition, VAT (19 percent of the sales price) applies.

How is this all supposed to be handled?

With its measure, the federal government is targeting the energy tax as a consumption tax. As an indirect tax, it is designed to be passed on to consumers by the taxpayers – i.e. the petrol station operators. According to the traffic light coalition, a temporary tax reduction means that passing it on to consumers in full also enables a corresponding price reduction and thus relief for citizens and the economy.

She expects that the prices at the petrol pumps will not fall immediately after June 1, but only with a delay of a few days. According to the state, the tax cut, which is limited to three months, will cost the state 3.15 billion euros. At the same time as the reduction by the end of August, the nine-euro ticket should also take effect in local transport.

The ADAC expects a rush to the pumps in the first days of June. Sometimes there could be longer waiting times and queues at the gas stations. If you want to avoid this, you should not be on the road with the last drop of fuel in order to be able to react more flexibly to the situation at the gas stations, advises the automobile club.

Are there any criticisms of the plans?

There is criticism of the tank discount from many sides. The opposition emphasized today in the Bundestag that the fueled price crisis will last longer than the three months. The Union therefore called for a significantly longer reduction in energy tax for two years. The period was also chosen unfavorably because of the holiday season. The left also considers the plans to have fallen short. The energy tax must be completely suspended “as long as prices are at an unacceptably high level,” said parliamentary group spokesman Dietmar Bartsch recently. Furthermore, the federal government has a duty to stop the “price gouging” and “take-away mentality” of the oil companies.

Michael Hüther, Director of the German Economic Institute (IW), criticized the fact that the relief was granted regardless of need. In addition, there is no guarantee that the tax relief will actually reach the consumer. Economy Achim Truger called the reduction in mineral oil tax “harmful and not very targeted from an incentive point of view”. “The FDP prevailed, which was apparently compensated for the waiver of the tank discount,” he said recently.

In March, Finance Minister Christian Lindner (FDP) proposed a state-wide flat-rate fuel subsidy, which caused a great deal of uproar – including among leading economists. High earners could benefit more because they own more cars and drive longer distances. In addition, a tank discount makes fossil fuels cheaper and counteracts climate protection. “We need the dampening effect of high prices on demand,” emphasized Veronika Grimm, a member of the German government’s Economic Advisory Council.

Do high prices really affect driving behavior?

In fact, compared to the beginning of the year, according to an ADAC survey from the end of April, every second German occasionally gives up the car to save energy and money. Just under a quarter of the more than 1000 respondents stated that they would not change anything at all.

In view of the Ukraine war, the automobile club recently called on its approximately 21 million members to save fuel. They should check whether they could use local public transport or the council more and drive fuel-efficiently, according to an open letter from the members of the Presidency, Christian Reinicke and Gerhard Hillebrand. In addition to the goal of reducing Germany’s dependence on Russian energy imports, falling demand could also have a dampening effect on fuel prices.

What tips does the ADAC give?

In the survey, 60 percent of ADAC members stated that they had succeeded in reducing fuel consumption through fuel-efficient driving. In order to reduce diesel and petrol emissions, the experts propose a number of measures – such as speed. However, anticipatory and steady driving is also important. This reduces consumption by up to 20 percent.

The experts also have tips on how to save at the petrol pumps: by choosing the cheapest petrol station and filling up at the right time. Drivers should compare fuel prices before filling up. For example, if you fill up at one of the motorway petrol stations, you usually pay more than 20 cents per liter more.

In addition, there are significant price differences over the course of the day. According to a recent ADAC study, fuel is generally cheapest between 6 p.m. and 7 p.m. and between 8 p.m. and 10 p.m. This alone could save up to seven cents per liter.

Bundestag discusses tank discount

Jan Zimmermann, ARD Berlin, May 13, 2022 5:57 p.m

#FAQ #tank #discount #work

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