German politicians call for relief, windfall tax amid record fuel prices

[UPDATE adds comments by chancellor]

German chancellor Friedrich Merz said that the government would introduce relief measures to help deal with record-high petrol prices due to the Iran war and the closing of the Strait of Hormuz – a major shipping route for oil, reported public broadcaster ARD. Merz said that the exact measures have not yet been finalised, but the government would make a proposal very soon.

The question of how to support citizens and companies that struggle with rising petrol and diesel prices due to international crises – while ensuring the transition away from the climate-damaging fossil fuels – has occupied the government for years. High fuel prices can encourage lower consumption and falling carbon emissions, and make EVs more attractive to those who can afford them, but relief remains necessary for people who cannot afford to switch to an electric vehicle. 

Economy and energy minister Katherina Reiche rejected calls to reintroduce a fuel discount, citing budget constraints, and said the government should instead consider targeted relief for low-income households, in an interview with RTL/ntv. 

Reiche said that her ministry proposed a direct payment as part of a package of measures already at the start of the crisis, but the government had opted for a fuel discount. She added that the government should also look at where energy taxes could be lowered, though she cautioned that cutting electricity tax "doesn't help someone standing at the petrol pump." 

Reiche's response came as politicians at the state and federal level called for a swift government response to soaring prices at the pump 

A spokesperson for the German finance ministry said that minister Lars Klingbeil would push for a European decision on a windfall tax on "excessive profits" made by oil companies during the crisis to help provide targeted relief to those most affected by high fuel prices at an upcoming meeting of European economy ministers. Klingbeil had called for such a measure together with other European finance ministers earlier this year. However, the European Commission would have to initiate it, the spokesperson said. 

The state premier of Saarland, a state in Germany's southwest, Anke Rehlinger, told the Rheinische Post that the federal government should "unleash" the country's cartel office and introduce subsidies modelled on neighbouring Luxembourg’s support scheme to curb prices. Meanwhile, Germany’s biggest automobile club, ADAC, called for more transparency around the price hikes, stating that rising oil prices could only partly justify petrol and diesel prices, ZDF reported.

Germany's government previously introduced two months of temporary tax cuts for petrol and diesel to "quickly provide relief to households and businesses" to deal with rising petrol prices linked to the war. But critics slammed the scheme for failing to help those truly in need, saying it would also do little to reduce the country's fossil fuel dependence.

Sustainable mobility advocates said the German government was "drawing the wrong lessons" from the Iran war by continuing to support fossil fuel use. They said it should instead use the crisis as an opportunity to invest in e-mobility, arguing that this was the only way to protect people from high fuel prices in the long term. 

In May, Germany launched a digital portal for applications for an electric-car subsidy programme, offering up to 6,000 euros to lower-income households buying or leasing new e-cars. In April, price comparison website Verivox found that the increase in fuel prices linked to the Iran war had pushed the cost advantage of driving electric vehicles over combustion-engine cars to a record high. Interest in purchasing EVs has surged in Germany and other countries since the beginning of the war. From January to August 2026, 26 percent of newly registered cars were battery electric vehicles (BEVs), up 53 percent compared to the same period last year, said motor authority KBA.