Estimating pass-through rates for the 2022 tax reduction on fuel prices in Germany

Jonas Dovern, Johannes Frank, Alexander Glas, Lena Sophia Müller and Daniel Perico Ortiz

Energy Economics, 2023, vol. 126, issue C

Abstract: We analyze the effectiveness of the German tax reduction on fuel prices (‘Tankrabatt’) that was introduced for three months, starting on 1 June 2022. We use the synthetic difference-in-differences estimator to compare actual retail prices of gasoline and diesel to those in a counterfactual situation without the tax reduction. For gasoline, we find that the tax reduction has been completely passed on to consumers. This result is robust to different approaches of constructing the synthetic control group. For diesel, we find evidence of at least partial pass-through, although the estimates are more sensitive to the employed specification. Moreover, the evidence suggests that pass-through rates for diesel started to decline in August while the tax reduction was still in place.

Keywords: Fuel; Gasoline; Diesel; Taxes; Synthetic control group (search for similar items in EconPapers)
JEL-codes: C22 E31 E65 H22 Q41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Working Paper: Estimating Pass-Through Rates for the 2022 Tax Reduction on Fuel Prices in Germany (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:126:y:2023:i:c:s0140988323004462

DOI: 10.1016/j.eneco.2023.106948

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