Germany’s 17-cent fuel-tax cut starts tomorrow
The effective reduction is approximately 17 cents per litre, and it will run until 31 December 2026. The measure will cost the federal government and Länder approximately €2.5 billion.
Someone buying 100 litres of fuel each month would save around €17 per month if the tax reduction is fully passed through. But tomorrow’s pump prices shouldn’t be compared mechanically with today’s.
Brent crude has recently been trading above $100 per barrel because of the Middle East conflict. Wholesale petrol and diesel prices can therefore move in the opposite direction to the tax reduction.
Crucial day for Volkswagen employees
Representatives of Volkswagen, IG Metall and the company’s works council meet in Hannover today for a formal review of the 2024 Zukunftstarifvertrag.
That agreement originally included around 35,000 job reductions in Germany by 2030, reduced bonuses and suspended wage increases. In return, VW made commitments on investments, products and German production locations.
The works council and IG Metall are now questioning whether VW’s increasingly aggressive restructuring plans remain compatible with those commitments.
Volkswagen argues that conditions have changed substantially because of geopolitical tensions and increasingly intense competition from Chinese manufacturers. For employees, today’s meeting is important because the central question is no longer simply how many jobs VW will cut.
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Lufthansa’s fuel shock
CEO Carsten Spohr said yesterday that the airline’s additional 2026 jet-fuel costs will exceed its previous estimate of €1.5 billion. Jet fuel represents roughly 30-40% of airline operating costs, making airlines particularly vulnerable to the current energy shock.
Lufthansa had previously expected total fuel costs of around €8.66 billion this year. Lufthansa has hedged about 86% of its 2026 fuel requirements, limiting its immediate exposure to spot prices. The company is also maintaining its operating-profit forecast of €1.7-€2.2 billion.
For travellers, risk is continued upward pressure on ticket prices and surcharges if expensive jet fuel persists.
Mercedes wants labour-cost savings
The company wants to reduce German labour costs by approximately €800 million, according to WirtschaftsWoche reporting cited by Reuters. Options discussed include longer working hours without corresponding additional pay, changes to Christmas and holiday bonuses, and reductions in special payments.
Management has separately warned that two German production plants could eventually be at risk unless manufacturing costs become more competitive.
Germany considers blocking another Chinese acquisition
Germany’s government intends to block Chinese state-owned shipping company Cosco (not to be confused with Costco) from acquiring an 80% stake in Hamburg logistics company Zippel.
Germany’s competition authority had already approved the transaction in February.
But the Economy Ministry is reviewing it under foreign-investment and national-security rules, particularly because Zippel handles logistics software and supply-chain data.
This seem to fit Germany’s broader effort to reduce strategic dependencies on China in ports, logistics, energy and critical infrastructure.
Market Review
|
Market proxy |
Daily change |
Quick interpretation |
|---|---|---|
|
MSCI World |
−0.31% |
Developed markets slipped as elevated bond yields and energy costs outweighed strength in technology shares. |
|
S&P 500 |
−0.33% |
US large caps declined for a second session as high Treasury yields continued to pressure valuations. |
|
Nasdaq-100 |
+0.16% |
Technology held up better as renewed AI enthusiasm supported semiconductor and mega-cap growth shares. |
|
Germany |
−0.57% |
The Germany ETF weakened despite a slightly positive DAX, reflecting currency and portfolio-composition differences. |
|
Euro Stoxx 50 |
−0.27% |
Eurozone equities remained under pressure from high energy prices and elevated government-bond yields. |
|
Emerging Markets |
−0.19% |
Emerging markets edged lower as a stronger dollar and high US yields remained headwinds. |
Market mood
Another cautious session. The pan-European STOXX 600 slipped around 0.1%, despite a strong 2.5% rally in technology shares, as elevated bond yields and expensive energy continued to weigh on investor sentiment. Germany’s DAX performed somewhat better and finished slightly positive.
Bottom Line
Watch Germany’s inflation release at 14:00 today. The consensus is roughly 3.2%, up from 2.9% in August. A materially higher or lower number could shift expectations for ECB policy and German financing costs. Germany’s temporary 17-cent-per-litre fuel-tax reduction starts on 1 October and lasts through the end of December. And watch out for Flight costs if you are planning something for the winter holidays.