ifo Fuel Discount Tracker

We use the ifo Fuel Discount Tracker to examine whether and to what extent oil companies are passing on the fuel discount to motorists. To enable that, we track the prices of diesel, Super E5, and Super E10 in Germany and apply state-of-the-art statistical methods to estimate how much of the fuel discount actually reaches the pumps.

Passing on the Fuel Discount Over Time

The figure shows how the fuel discount has affected the prices of diesel (blue line), Super E5 (red line), and Super E10 (green line), in cents per liter. The solid vertical line marks the date the fuel discount was introduced (May 1), while the dotted vertical line marks the date it was passed by the Bundestag and Bundesrat (April 24). The price impact is measured as the change in the price difference between Germany and France. If the fuel discount were fully passed on, prices (relative to those in France) would drop by 17 cents per liter. This is represented by the purple horizontal line.

Chart: Tankrabatt Tracker 01-07-2026

Background

In response to rising fuel prices, the German government has decided to lower the energy tax rates on diesel and gasoline (“fuel discount”). Together with the lower VAT, this measure will reduce tax on fuels by about a gross amount of 17 cents per liter. The reduction will take effect on May 1, 2026, and initially run for a limited period of time until June 30, 2026. The coalition committee agreed on this measure with the leaders of the CDU, CSU, and SPD on April 13, 2026. On April 24, the Bundestag and the Bundesrat voted in favor of introducing the fuel discount.

The rise in fuel prices is a result of the Iran war. The fuel discount is intended to alleviate the financial burden on motorists. However, that will only happen if the oil companies and gas station operators pass on the reduction in the energy tax to motorists. While the German government assumes this will be the case, it is not certain that the discount will be (fully) passed on, as oil companies and gas station operators set the prices for fuel.

The fuel discount is a costly measure. According to the draft bill proposed by the coalition parties, the measure will result in a decrease in tax revenue of EUR 1.6 billion this year. It also conflicts with environmental policy goals.

Estimation Approach

Fuel prices are subject to fluctuation. That is attributable, among other things, to changes in the price of oil, transport and procurement conditions, and demand. To determine the impact of policy measures such as the fuel discount on fuel prices, the influence of other factors affecting prices must be factored out. A simple before-and-after comparison doesn’t achieve that.

To identify whether and to what extent the fuel discount is actually being passed on to consumers, we instead compare fuel price trends in Germany and France using a so-called difference-in-differences approach. Price trends in France serve as a counterfactual. This means it is assumed that, after May 1, 2026, prices in Germany would have followed the same trend as French fuel prices without the introduction of the fuel discount. As part of that, the daily difference between the average fuel prices in Germany and those in France is first calculated and then adjusted for the price difference on a reference date before the fuel discount came into effect. This approach allows for country-specific differences in price levels to be taken into account. We have chosen April 23 – one day before the fuel discount was approved by the Bundestag – as the reference date for our analysis. On this day, the difference between the price of fuel in Germany and France is roughly equal to the weekly average.

Data

The data on fuel prices in Germany comes from the Market Transparency Unit of the Federal Cartel Office. All gas stations in Germany are required to report price changes to the Market Transparency Unit. This data can be accessed on the price comparison site “tankerkoenig.de.” Data on fuel prices in France comes from the online database “Le prix des carburants” managed by the French Ministry of Economics and Finance.

We have up-to-the-minute information on the prices of Super E5 and Super E10 as well as diesel for all gas stations in both Germany and France. For our analysis, we aggregate this data in two steps. First, we calculate the time-weighted average daily price for each gas station. In the second step, we calculate the mean value of these daily averages across all gas stations. We only take into account prices in the time window between 6 a.m. and 10 p.m. In calculating the average, we weight the fuel prices based on the length of time for which the prices applied. The average values calculated in this way indicate the price per liter a motorist had to pay if they had visited any gas station at any given time.