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The Impact of the German Fuel Discount on Prices at the Petrol Pump

Author

Listed:
  • Volker Seiler

    (ICN Business School, CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine)

  • Nico Stöckmann

    (Helmut Schmidt University, University of the Armed Forces Hamburg)

Abstract

This paper investigates the price impact of the fuel discount in Germany, which was introduced between June and August 2022 to partially compensate increased energy costs. Using the augmented synthetic control method (ASCM) to construct the counterfactual, we provide quantitative evidence to the heated debate concerning the impact of this policy tool and find the fuel discount to have decreased consumer prices of petrol (diesel) by at least 0.30 euro per litre (0.10 euro per litre) on average. The results are robust to various sensitivity checks. Thus, oil companies and petrol stations decreased prices for consumers and passed on about 85 % (65 %) of the discount in case of petrol (diesel). Moreover, we do not find signs of excessive price increases in anticipation of the fuel discount.

Suggested Citation

  • Volker Seiler & Nico Stöckmann, 2023. "The Impact of the German Fuel Discount on Prices at the Petrol Pump," Post-Print hal-04103434, HAL.
    • Handle: RePEc:hal:journl:hal-04103434
    DOI: 10.1515/ger-2022-0108
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    Cited by:

    1. Frederik von Waldow & Heike Link, 2024. "Spatial Competition and Pass-through of Fuel Taxes: Evidence from a Quasi-natural Experiment in Germany," Discussion Papers of DIW Berlin 2086, DIW Berlin, German Institute for Economic Research.
    2. Mario Liebensteiner & Jakob Losert & Sarah Necker & Florian Neumeier & Jörg Paetzold & Sebastian Wichert, 2024. "Almost Fare Free: Impact of a Cheap Public Transport Ticket on Mobility Patterns and Infrastructure Quality," CESifo Working Paper Series 11229, CESifo.
    3. Drolsbach, Chiara Patricia & Gail, Maximilian Maurice & Klotz, Phil-Adrian, 2023. "Pass-through of temporary fuel tax reductions: Evidence from Europe," Energy Policy, Elsevier, vol. 183(C).

    More about this item

    Keywords

    augmented synthetich control method; causal inference; comparative case study; counterfactual; fuel discount;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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