Austria’s government is expanding its petrol price relief programme, increasing fuel-tax cuts and reinstating limits on retailers’ margins as higher oil prices linked to the conflict in the Middle East put renewed pressure on consumers.
Under the measures announced on Wednesday, the petrol-tax reduction will rise from 1.9 cents per litre to 6.7 cents from October 1. At the same time, the government will again limit retailers’ margins by 3.5 cents per litre.
Unlike previous extensions, which have generally lasted only one month, the latest package will remain in force for two months, covering October and November.
The measures are intended to reduce the amount motorists pay at petrol stations as disruptions to oil flows through the Strait of Hormuz contribute to higher energy prices and add to inflationary pressures.
Chancellor Christian Stocker said the government was responding to the renewed increase in petrol prices.
"The escalation in the Middle East and the resulting Trumpflation have again led to a significant rise in petrol prices. We are addressing this development with the new petrol price brake, which will bring down prices at the pump," Chancellor Christian Stocker said.
The government has used the term "Trumpflation" to describe what it says is the inflationary impact of the Middle East conflict and the resulting disruption to global oil supplies, while blaming US President Donald Trump for contributing to persistent price pressures.
Two-part intervention
Austria introduced the petrol price brake in April as a two-part intervention designed to limit the impact of higher fuel costs on consumers.
The original package combined a cap on retailers’ margins with a reduction in petrol tax. Together, the measures amounted to 10 cents per litre.
The margin component was subsequently scrapped in June, leaving the tax reduction as the main element of the government’s intervention.
On August 31, the conservative-led coalition government announced that it would extend a 1.9-cent-per-litre cut in petrol tax for another month, through the end of September.
The latest decision significantly increases the tax relief while bringing back the margin restriction.
From October, the 6.7-cent-per-litre tax reduction and the 3.5-cent-per-litre margin reduction will together provide 10.2 cents per litre in relief through the two measures, although their effects differ because one reduces the tax paid on fuel while the other limits the margin retailers can charge.
Government weighs inflation pressures
The decision comes as the coalition government continues to grapple with elevated inflation and the impact of higher energy costs on households and businesses.
The three ruling centrist parties have generally reviewed the petrol price measures at the end of each month, deciding whether to renew them and whether to modify their structure.
The latest agreement breaks from that pattern by establishing the new arrangement for two months rather than one, giving motorists and fuel retailers a longer period of certainty.
The government said the intervention was necessary because developments in the Middle East had contributed to a significant increase in petrol prices.
The Strait of Hormuz, a critical route for global oil shipments, has been affected by the conflict, creating additional uncertainty in international energy markets. Higher oil prices can feed through to petrol costs and, more broadly, increase expenses for transport, manufacturing and other businesses that depend on fuel.
Austria’s latest intervention therefore represents another attempt by the government to shield consumers from part of the immediate impact of higher fuel prices while wider inflationary pressures persist.
The measures will take effect on October 1 and are scheduled to remain in place through November.