The Rise of Refinery Margins: The Case of the Energy Tax Cut in Germany

Leonard Gregor and Justus Haucap

No 12214, CESifo Working Paper Series from CESifo

Abstract: This paper evaluates the temporary reduction in energy taxes implemented by the German government between June and September 2022. We use pricing and quantity data from the wholesale market for crude oil, gasoline, and diesel and find an average pass through of 80% to 85% of the tax cut, which amounts to a 3.7 cents per liter increase in wholesale prices net of tax. We do, however, document significant treatment heterogeneity over time and across regions within Germany. When weighting price effects by quantities sold, the estimated pass-through of the tax cut decreases to about 70% for gasoline and 58% for diesel, suggesting that refinery margins increased significantly during times of higher demand.

Keywords: pass-through; tax reduction; fuel prices; wholesale markets (search for similar items in EconPapers)
JEL-codes: H22 L13 L71 Q48 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-ene, nep-pbe and nep-pub
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Working Paper: The rise of refinery margins: The case of energy tax cut in Germany (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12214

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