The German federal finance ministry, led by Lars Klingbeil (SPD), rejects claims that the state stands to gain from the steep rise in petrol prices. According to a briefing the ministry has issued-reported by “Der Spiegel”-the outlook is actually for a shortfall.
At a 19 % value‑added tax on the full amount of fuel sold, the ministry calculated that high prices and a monthly volume of more than five billion litres would generate roughly €320 million in additional VAT revenue. Extrapolated over a year, that would amount to nearly €4 billion. However, the calculation is reduced dramatically for two reasons.
First, about 40 % of the fuel pumped – largely diesel used by commercial customers such as freight companies and construction firms – is purchased under a value‑added tax exemption. This cuts the extra VAT to roughly €200 million per month. Second, higher prices have led to a behavioural change: consumers drive less and sometimes avoid trips altogether. Drawing on lessons from the last energy crisis triggered by Russia’s invasion of Ukraine, the ministry estimates the total volume sold fell 5 %. That cuts the extra VAT revenue further to about €150 million per month in the short term.
The distribution of the surplus is split among the federal government, the states (Länder), and the municipalities. The federal budget retains around 47 % of the added revenue. Yet this theoretical profit is offset by losses from the energy tax, which is levied on quantity rather than price. The resulting shortfall is estimated at €140 million per month for the federal budget alone, according to the chancellor’s office. Consequently, the ministry predicts an overall loss, although the precise size remains uncertain. The ministry cautions that the “actual magnitude of the quantity reduction is very uncertain” in its internal memo.
An additional effect that the ministry considers is the limited consumption budget that ordinary households face. If higher fuel prices force consumers to cut spending elsewhere, that will inevitably erode VAT receipts from those other categories, further denting government revenue. In the scenario of an ongoing war and the rising uncertainty generated by the Iran conflict, the ministry expects these negative consequences for the federal budget to deepen.
A preliminary analysis by Stefan Bach, a tax expert at the German Institute for Economic Research (DIW), reaches broadly similar conclusions. Bach models the situation assuming price spikes persist for a full year; in that case, fuel consumption might drop by about 4 %. With higher prices, the value‑added tax revenue could rise by up to €1.9 billion. But only if consumers do not offset the extra expenditure by cutting back elsewhere, such as reducing savings or depleting assets. When expected losses from the energy tax, CO₂ levy and related duties are accounted for, Bach projects that net tax revenue from fuel sales would actually fall by roughly €1.1 billion in his scenario.