The German Federal Ministry of Finance, led by Lars Klingbeil (SPD), rejects the claim that the state benefits from the sharp rise in gasoline prices. Officials have prepared a memorandum that the magazine “Spiegel” reports on.
According to the initial assumptions in the memorandum, the 19 % value‑added tax (VAT) on all fuel sales would increase revenue. With monthly sales of more than five billion litres and a price rise of 40 cents per litre, that would amount to €320 million per month, or almost €4 billion a year.
The ministry’s calculations reduce that figure considerably. About 40 % of the fuel – mainly diesel – is bought by commercial customers such as freight operators and construction firms that are exempt from VAT. This cuts the additional VAT revenue to €200 million a month. Higher prices also lead motorists to drive more sparingly or avoid trips altogether. Drawing on experience from the last energy crisis triggered by the Russian invasion of Ukraine, the officials estimate that overall fuel sales will fall by roughly 5 %. That would lower the added VAT income to €150 million per month.
The surplus is shared among the federal government, the states and local authorities, with the federal budget receiving about 47 % of the additional revenue. However, the expected profit is nullified by a drop in energy tax – which is levied on the quantity sold rather than the price – that harms the federal budget alone. The vice‑chancellor’s staff projects a monthly shortfall of about €140 million for the federal government. In total, the ministry ends up with a loss, though the exact magnitude remains uncertain. “The actual extent of the volume reduction is highly uncertain” the ministry paper notes.
Moreover, the officials point out that consumers have a limited discretionary budget. Consequently, they will likely cut spending in other areas to cover higher fuel costs, leading to further reductions in VAT receipts. The ministry also expresses concern that a protracted war will exacerbate economic uncertainty as fuel prices rise, further hurting the federal budget.
Tax expert Stefan Bach at the German Institute for Economic Research (DIW) arrives at similar results in preliminary estimates. He suggests that, if price increases persist for a full year, fuel consumption could drop by 4 %. The resulting rise in VAT revenue would amount to a maximum of €1.9 billion, but only if consumers do not compensate the extra cost by reducing spending elsewhere. When considering expected losses from the energy tax and CO₂ levy, Bach finds that total tax income from fuel sales would decline by roughly €1.1 billion.
