Germany ends Merz government's fuel rebate as July 1 deadline passes

The fuel rebate (Tankrabatt) introduced by Chancellor Friedrich Merz’s coalition to offset price spikes after the Iran war cost €1.6 billion and lowered pump prices by about 12‑16 cents per litre. It expires on 1 July 2026. CDU deputy Sepp Müller justified the termination, saying: “Es ist finanzpolitisch nicht sinnvoll. Wir können es uns in der aktuellen Lage nicht leisten, Schulden dafür aufzunehmen.”

Ifo analysis shows the benefit largely went to high‑mileage, higher‑income drivers, while low‑income motorists received only marginal relief. Readers criticized the scheme as “nur Augenwischerei” and “für die Verbraucher nur Augenwischerei.” Government officials are discussing alternatives such as targeted subsidies for low‑income drivers, a higher commuter allowance, an energy‑tax cut, a fuel‑price cap, or a windfall tax on oil firms, but no concrete measure has been decided yet.