Germany's fuel tax rebate helps few low‑income commuters, Ifo finds

The Ifo Institute calculated that the German fuel‑tax rebate introduced on 1 May has largely been passed on to motorists, with about €1.6 billion of the tax cut reaching drivers. The rebate benefits frequent, high‑consumption drivers more than low‑income commuters, who receive little relief.

Ifo warns that lower fuel prices also diminish incentives to save fuel and that extending the rebate beyond June would not address the core issue. The institute recommends ending the scheme at the end of June and adopting more targeted measures, such as reforms to the income‑tax system, to support financially vulnerable households.

The analysis argues that the broad rebate is not an effective tool for assisting the commuters most in need of relief.