They are intended to relieve commuters and make driving cheaper: At the end of March, the federal government decided to reduce taxes on fuel. The tank discount should take effect from June 1st. Will refueling become cheaper in one fell swoop? Will petrol and diesel remain cheap? And are there any tank tips? We answer the most important questions about fuel price reductions.

On the key date, the energy tax on petrol and diesel will fall by 30 and 14 cents for a limited period. The tax is currently 65.45 cents per liter of petrol and 47.04 cents per liter of diesel. From June 1st, 35.45 cents and 33.04 cents will apply. The tax is only reduced for a limited period of time, it will rise again on September 1st. At least that’s the plan. The tax losses due to the tank discount amount to around 3.15 billion euros.

As usual, the petrol stations will display the new prices on price and petrol pumps. The fuel can also be refueled and paid for as always.

This is not an easy question to answer and has to do with the taxation of petrol, among other things. The energy tax is levied in the interim storage facility or in the refinery. The fuel at the gas station is already partially taxed. The gas station then charges VAT. The fuel in the tanks of the petrol stations is taxed even more expensively on June 1st than the fuel that is then delivered new. If the gas station lowers the price by 30 cents at midnight, it loses this money.

It may be that the oil companies are still doing this to avoid accusations that they want to charge the driver. The price may also drop, but not by 30 cents, so the loss for the gas stations is not too great in the first few days. It also plays a role whether there are many gas stations in an area. Then the competition for customers could lower the price more quickly. The industry suspects that it will take a few days for the tax cut to take full effect. “There has never been such a measure in Germany before,” says a manager. That is why it is difficult to predict.

An industry expert recommends filling up to last around June 4th. Then the tax cuts should take full effect everywhere. And the first rush for cheaper fuel will be over.

Since it became known that the federal government wants to help motorists with a tax cut for fuel, the mineral oil companies and gas station operators have been planning. Especially in the first days of June they expect a bigger rush than usual. This means that more fuel is required. It can be heard that holiday bans for tanker drivers are being considered so that there are no delivery bottlenecks.

At the Fuels trade association

The mineral oil industry dares not make any predictions. In principle, market experts expect that the price of fuel will tend to rise. In the worst case, it could eat up the tax cut. Oil has been getting more expensive on the world market for weeks – the raw material for petrol and diesel. Above all, oil is becoming more expensive because the global economy is growing again after the corona pandemic and more oil is needed. But the price of gasoline also depends on how busy the refineries that turn oil into gasoline are. And how the price of petrol in the USA, one of the largest sales markets, is developing. If the demand for gasoline increases in the USA, for example, and prices rise there, it may be worth shipping gasoline from a refinery in Rotterdam to the USA. The fuel would not be available in Europe. If the supply becomes so scarce, the price also rises in Europe. And last but not least, motorists have a say in the price: If they want to fill up a lot, for example at the start of the holiday season, the price of gas will also rise.

Russia is the third largest producer in the world, after the USA and Saudi Arabia. If it fails or is disconnected, oil prices will rise and, as a result, fuel prices as well. Especially when other countries, such as the Organization of Petroleum Exporting Countries (OPEC), do not deliver more than before and fill Russia’s gap. The cartel, which controls 34.7 percent of world production, currently does not want to increase production. Some members can’t either.

On June 1, 2021, a liter of Super E10 cost an average of 1.50 euros and a liter of diesel 1.35 euros. Global demand for oil and fuel was still low due to the corona pandemic. Then the economy and demand picked up, and prices rose. Russia’s attack on Ukraine pushed them further. Prices peaked on March 10: E10 cost 2.20 euros, diesel even 2.33 euros per liter. After that they fell, most recently they picked up again a bit to around 2.10 euros (E10) and 2.03 euros (diesel).

On behalf of the Federal Ministry of Economics, the Federal Cartel Office is investigating whether the mineral oil companies are exploiting their market power and colluding to keep prices high. After all, there are only a handful of providers. In the past, there have always been such allegations, especially when prices went up at the beginning of the holidays. However, the antitrust authorities never found evidence of collusion, but referred to the higher demand at the beginning of the holiday season. The high profits of the oil companies come mainly from the oil business. Mainly because the global economy picked up, the price per barrel (159 liters) has risen from a good 40 dollars to more than 100 dollars in the past few months. The production costs have remained largely the same, and the profit has increased accordingly. “The profits of the oil multinationals have very little to do with the German petrol station market,” says an industry representative.

Peter Hengstermann also fears that the lower fuel prices may not reach the driver. The head of the petrol station association TIV considers a further increase in the already skyrocketing fuel costs by June 1 to be “quite possible”. He said to the “Bild”: “We expect that the mineral oil companies will artificially drive up prices in order to swallow up the tank discount so that cash can continue to be paid despite the discount.”

From today’s perspective, the fuel price will increase by 30 cents (petrol) and 14 cents (diesel) overnight.

The article “Mega rush on June 1st? Do prices fall at midnight? What you need to know about the tank discount” comes from WirtschaftsKurier.