Germany and the Philippines have both announced fuel tax cuts in response to soaring energy prices, which have been exacerbated by the escalation of the US-Israeli conflict with Iran. In Berlin, Chancellor Friedrich Merz stated that the German government would reduce fuel duties by approximately 17 euro cents per litre for petrol and diesel over a two-month period. This initiative aims to alleviate the financial burden on households and businesses facing increased transport costs, particularly those whose work requires extensive travel. To compensate for the anticipated loss in revenue, the government plans to accelerate a previously scheduled increase in tobacco taxes. Finance Minister Lars Klingbeil emphasized that this measure is part of a broader strategy to mitigate the economic repercussions of the conflict, which Merz cautioned would have a lasting impact on Germany’s economy. Leading economic institutes have already revised their growth forecasts for 2026, lowering them from 1.3 percent to 0.6 percent due to the energy shock and other challenges, including US tariffs and competition from China.
In Manila, President Ferdinand Marcos Jr. announced reductions in excise taxes on liquefied petroleum gas (LPG) and kerosene to assist households in managing rising fuel costs. The tax on LPG will be decreased by 3.36 pesos per kilogram, while the kerosene tax will be reduced by 5.60 pesos per litre. Both fuels are commonly used for cooking, with kerosene being particularly vital for low-income families. Marcos mentioned that a government crisis committee would convene on Tuesday to evaluate potential further adjustments to taxes on petrol and diesel, which are the primary fuels for public transport. The Philippines relies heavily on crude oil imports from the Middle East and refined products from Asian refineries that depend on shipments through the Strait of Hormuz, which Iran has effectively closed. Since the onset of the conflict, local diesel prices have more than doubled, and March inflation data indicated that food prices were rising nearly twice as quickly as in February. Both governments have underscored that these measures are temporary and that the broader economic risks stemming from the conflict will continue to loom.
Comments are closed for this story.