Merz government approves fuel-price discount
September 18, 2026
Germany’s government still undecided on fuel price relief
Germany’s governing coalition is under pressure to show progress on bringing soaring gas prices under control ahead of elections this weekend in the northeastern states of Mecklenburg-Western Pomerania and Berlin.
On Friday, Mecklenburg-Western Pomerania’s Social Democrat (SPD) state premier, Manuela Schwesig, told the public broadcaster ZDF that Friedrich Merz should quickly implement a price cap.
The SPD is the junior coalition partner with Chancellor Friedrich Merz’s conservative bloc (CDU/CSU) at the federal level, but the parties have diverging ideas on how to address the soaring prices brought on the by the Iran war.
Despite Merz’s insistence on Tuesday that gas price relief is coming quickly, the ruling coalition has yet to agree on an approach.
Germany’s conservatives have resisted the SPD’s call for price caps and a windfall profit tax in favor of a fuel tax relief scheme.
Such a scheme was enacted in the first months of the Iran war and expired in June.
What the parties are saying about fuel prices in Germany
On Thursday evening, CDU General Secretary Franziska Hoppermann told a talk show that the coalition government was aiming for gas price relief of “around 22, 23, 25 cents per liter” by the beginning of October, without sharing concrete measures on how to reach that.
Germany’s SPD Finance Minister Lars Klingbeil has for months advocated a government-enforced price cap on gasoline and diesel, along with new taxes on heavy oil company profits.
“We are right now looking for solutions,” said Klingbeil on Friday at an EU finance minister meeting in Dublin, Ireland.
“I want a clear, quick signal at the gas pumps right now,” said Klingbeil, who is also vice chancellor. “I’m confident that we’ll be able to get it done very quickly.”
Klingbeil added he expects the European Commission to prepare proposals for a windfall profit tax by the next meeting of EU finance ministers in October.
Prices for gasoline and diesel have broken record highs several times over the past week. On Thursday, the ADAC motoring club reported diesel at a record-breaking €2.47 per liter ($10.72 per gallon) on average, and the lowest-cost E-10 gasoline at over €2.30.
