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Germany considering subsidizing fuel costs for workers

In the face of rising gasoline prices from 45-66 euros per liter, the German government is considering financial support for travel costs for workers.

The wave of rising prices in the energy sector is becoming increasingly difficult for households, said German Economy Minister Robert Habeck. “Heating, electricity and fuel costs are very high, putting pressure on households, the lower the income group, the bigger the impact,” he assessed.

He also announced that the German government would launch another bailout package, including some form of financial support to ease the burden of high fuel prices for workers.

Since the beginning of the war in Ukraine, fuel price increased significantly in Germany. Diesel increased by about 66 cents per liter (nearly VND 16,700), while a liter of E10 gasoline increased by about 45 cents (nearly VND 11,400). Soaring energy prices have prompted the government to introduce a series of measures to ease the burden on households, including lifting taxes under the Renewable Energy Act (EEG) ahead of schedule, providing subsidies to low-income households.

A price list at a gas station in Kiel, Schleswig-Holstein (Germany).  Photo: Image Alliance/Frank Molter

A price list at a gas station in Kiel, Schleswig-Holstein (Germany). Photo: PAlliance/Frank Molter image

However, Minister Robert Habeck said the bailout may not be as easy as the gas subsidy package proposed by German Finance Minister Christian Linder. “The proposal has faltered from the start and has lost more and more traction this week. Any bailout would certainly cover the travel sector, but perhaps in a more complicated way,” Habeck said on radio. Deutschlandfunk when asked if he supported Linder’s plans.

Germany’s economy minister said he wanted financial support in the face of rising fuel and electricity prices “as soon as possible”. However, his agency has not announced the decision.

Regarding the fuel subsidy for car drivers, the German Ministry of Finance, so far, the amount of the subsidy has not been determined. As expected, this amount will be deducted from the driver’s bill when paying at the gas station. The gas station operator must then submit a receipt to the tax office for a refund.

In addition to helping consumers, the German government runs a credit support program for German companies that are subject to EU sanctions against Russia. According to the daily newspaper bigBridging assistance is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

European governments are trying to cope with soaring prices for energy and other commodities to maintain voter support with sanctions against Russia for attacking Ukraine.

On March 16, Germany approved a 4.5 billion euro ($5 billion) tax relief package for consumers and debated additional relief measures. Meanwhile, French Prime Minister Jean Castex introduced new measures, including funding for energy-intensive companies estimated at 3 billion euros. Greece will provide subsidies for those with low pensions and other vulnerable groups. Portugal has reduced fuel taxes and provided a 400 million euro credit for affected industries.

Xiao Gu (based on Bloomberg, Local environment)

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