German fuel prices drop in May after tax cut and oil price decline

In May the average price of gasoline (Super E10) in Germany fell to €1.98 per litre, 13 cents lower than in April, while diesel slipped to €1.99 per litre, a drop of 27 cents. The reduction reflects the 17‑cent per litre energy‑tax cut introduced on 1 May and a fall in raw‑oil prices after the Iran conflict, both of which were gradually passed on to consumers. By the end of the month diesel became cheaper than Super E10 for the first time since early March, reversing a previous price gap of around nine cents.

Analyses by the Monopolkommission and the Ifo Institute show that the tax cut is now fully reflected in pump prices, with the price differential between Germany and neighbouring France used as a key indicator of the “Tankrabatt” effect. The lower fuel costs contributed to a decline in Germany’s inflation rate to 2.6 % in May, down from 2.9 % in April.