Germany's governing coalition on Monday announced fuel price relief for consumers and businesses worth 1.6 billion euros ($1.9 billion), following a spike in oil prices due to the Iran war.
The energy tax on diesel and petrol will be reduced by about 0.17 euros per litre for a period of two months, a joint paper by the conservative CDU party and their centre-left SPD coalition partners said.
The Iran war has forced countries, including Germany, to tackle the biggest-ever disruption to global energy supplies and a planned U.S. blockade of Iranian ports and coastal areas is further inflating crude oil prices.
Speaking at a press conference on Monday, Chancellor Friedrich Merz said the coalition was doing everything it could to tackle problems caused by the Iran war, which has been put on hold for now in a fragile ceasefire deal.
The coalition partners also agreed to allow companies to pay a 1,000 euro relief bonus per employee, free of payroll taxes and social security charges.
