Easter Oil Prices Hit Record High; Germany Considers Cash Subsidies to Relieve Drivers
On Easter Monday, Germany's average diesel price rose to approximately 2.48 euros per liter, setting a new historical record. To counter price volatility, Germany implemented a new rule from April 1st, allowing gas stations to adjust prices only once at noon daily, but prices continue to climb. The federal government is accelerating discussions on relief measures, considering car tax reductions or a "direct payment mechanism" for cash subsidies. While car tax reductions face criticism for uneven distribution, the direct payment mechanism is seen as more immediate and equitable. Related decisions are expected after the Easter holidays.
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- 📰 Published: April 7, 2026 at 08:21
- 🔍 Collected: April 7, 2026 at 09:00 (39 min after Published)
- 🤖 AI Analyzed: April 15, 2026 at 12:22 (195h 22m after Collected)
According to data from the German Automobile Club (ADAC), the national average diesel price on Easter Monday rose to approximately 2.48 euros per liter (about NT$91), an increase of over 6 euro cents from the previous day, setting a new historical record.
Germany, which employs a dynamic pricing mechanism, allows gas stations to adjust prices multiple times daily based on market supply and wholesale prices. In response to recent drastic oil price fluctuations, Germany implemented a new system from April 1st, stipulating that gas stations nationwide can only raise oil prices once a day at noon, hoping to reduce price volatility and increase transparency.
This system, modeled after Austria's approach, theoretically avoids information asymmetry caused by frequent price adjustments. However, after several days of implementation, oil prices continue to rise, with gas stations showing a "concentrated increase" during the noon adjustment period, failing to alleviate pressure on drivers.
The federal government is therefore accelerating discussions on new relief measures. Handelsblatt, citing government sources, reported that officials are considering reducing car taxes or adopting a "direct payment mechanism" (Direktauszahlungsmechanismus) for cash subsidies to reduce the burden on drivers.
Supporters of car tax reductions argue that adjusting existing tax systems is relatively simple administratively and can be integrated with the current fiscal system, avoiding the technical and implementation costs required to build a separate distribution mechanism.
However, this approach also faces questions about uneven distribution effects. German car tax is calculated based on engine displacement and CO2 emissions; if tax rates are reduced, owners of larger vehicles, who originally paid higher taxes, would receive greater reductions, making it difficult to precisely achieve the relief goal. Furthermore, car tax is collected annually, making it unable to immediately alleviate the pressure of rising oil prices on car owners.
In contrast, the "direct payment mechanism" is considered a more immediate and equitable solution. If a fixed amount is distributed, each car owner would receive the same subsidy, regardless of vehicle type, and funds could be quickly delivered to the public.
Germany has previously considered direct cash payments as a policy tool. In 2021, the federal government planned to convert carbon pricing revenue into a "climate allowance" (Klimageld) to mitigate the impact of rising energy prices on low-income groups, but it was not implemented due to fiscal and technical factors.
However, that policy planning led to the establishment of a system in Germany for direct bank transfers from the government to individuals' accounts, with its core being the linking of personal tax identification numbers to bank accounts, managed uniformly by the Federal Central Tax Office (BZSt).
Handelsblatt believes that under the continuous pressure of rising energy prices, this "direct payment mechanism" may be put into actual operation for the first time. The federal government has established an oil price working group to comprehensively evaluate various relief measures, and related decisions are expected after the Easter holidays. (Edited by Chen Huiping) 1150407
Germany, which employs a dynamic pricing mechanism, allows gas stations to adjust prices multiple times daily based on market supply and wholesale prices. In response to recent drastic oil price fluctuations, Germany implemented a new system from April 1st, stipulating that gas stations nationwide can only raise oil prices once a day at noon, hoping to reduce price volatility and increase transparency.
This system, modeled after Austria's approach, theoretically avoids information asymmetry caused by frequent price adjustments. However, after several days of implementation, oil prices continue to rise, with gas stations showing a "concentrated increase" during the noon adjustment period, failing to alleviate pressure on drivers.
The federal government is therefore accelerating discussions on new relief measures. Handelsblatt, citing government sources, reported that officials are considering reducing car taxes or adopting a "direct payment mechanism" (Direktauszahlungsmechanismus) for cash subsidies to reduce the burden on drivers.
Supporters of car tax reductions argue that adjusting existing tax systems is relatively simple administratively and can be integrated with the current fiscal system, avoiding the technical and implementation costs required to build a separate distribution mechanism.
However, this approach also faces questions about uneven distribution effects. German car tax is calculated based on engine displacement and CO2 emissions; if tax rates are reduced, owners of larger vehicles, who originally paid higher taxes, would receive greater reductions, making it difficult to precisely achieve the relief goal. Furthermore, car tax is collected annually, making it unable to immediately alleviate the pressure of rising oil prices on car owners.
In contrast, the "direct payment mechanism" is considered a more immediate and equitable solution. If a fixed amount is distributed, each car owner would receive the same subsidy, regardless of vehicle type, and funds could be quickly delivered to the public.
Germany has previously considered direct cash payments as a policy tool. In 2021, the federal government planned to convert carbon pricing revenue into a "climate allowance" (Klimageld) to mitigate the impact of rising energy prices on low-income groups, but it was not implemented due to fiscal and technical factors.
However, that policy planning led to the establishment of a system in Germany for direct bank transfers from the government to individuals' accounts, with its core being the linking of personal tax identification numbers to bank accounts, managed uniformly by the Federal Central Tax Office (BZSt).
Handelsblatt believes that under the continuous pressure of rising energy prices, this "direct payment mechanism" may be put into actual operation for the first time. The federal government has established an oil price working group to comprehensively evaluate various relief measures, and related decisions are expected after the Easter holidays. (Edited by Chen Huiping) 1150407
FAQ
What is the situation with oil prices in Germany during Easter?
On Easter Monday, the national average diesel price in Germany rose to approximately 2.48 euros per liter, setting a new historical record.
What measures has the German government taken to address rising oil prices?
The government implemented a new rule allowing gas stations to adjust prices only once at noon daily, and is considering reducing car taxes or using a "direct payment mechanism" for cash subsidies.
What are the advantages of the "direct payment mechanism" for cash subsidies?
This mechanism is considered more immediate and equitable, allowing a fixed amount to be distributed to each car owner regardless of vehicle type, and can quickly deliver funds to the public.