The development of consumer prices, especially regarding energy prices (household energy and fuel), placed a particular burden on private households in 2022, but also posed and will continue to pose a challenge for many people in subsequent years. Since spring 2022, the German Federal Government has therefore adopted three comprehensive relief packages aimed at helping consumers to cope with the additional costs. Some of these measures directly affect consumer prices and have an impact on their development. The majority of these relief measures have already expired or have been and are being withdrawn. Therefore, the measures from the 1st and 2nd relief package are no longer included here. In addition, legal measures have been enacted that are not only intended to help achieve environmental and climate targets, but also influence consumer prices.
CO2 pricing
The CO2 price, introduced by the Federal Government in 2021, was increased from 45 to 55 euros per tonne on 1 January 2025. This increase will likely again affect the price development of fossil fuels such as heating oil, natural gas, diesel and petrol from January 2025, as companies usually pass on increased costs to consumers.
In January 2024, the CO2 price increased from 30 to 45 euros per tonne, which also influenced upwards the price trend of fossil fuels. The introduction of a CO2 price is part of the Federal Government's climate package and serves as a market-based instrument for reducing CO2 emissions. The national starting price was set at 25 euros per tonne in 2021 and has been gradually increased so far. Other EU member states have also introduced CO2 pricing.
Deutschlandticket
With the third relief package, the so-called "Deutschlandticket" was introduced at a monthly price of 49 euros for 2024. Since 1 January 2025, the Deutschlandticket has cost 58 euros per month. The impact of the price increase on the consumer price indices will be taken into account from the reporting month of January 2025.
The ticket was included in the consumer price index from the reporting month of May 2023 - the month in which it could be used for the first time. Compared to the "9 euro ticket," the ticket is only partially cheaper than the usual market price. Therefore, it had a dampening effect on the consumer price indices for passenger transport services, especially for monthly tickets for regional and local public transport. However, the impact on the consumer price index as a whole was comparatively small.
Reduced VAT rate of 7% for restaurants
As part of the Covid-related interim financial help, VAT for on-site consumption was reduced. A reduced VAT rate of initially 5% (until 31 December 2020) and later 7% applied. Due to continuing inflation, this relief measure was also extended until 31 December 2023. However, the effects of this measure on consumer price trends were no longer recognisable in the rates of change compared to the previous year in 2023 after more than a year.
In January 2024, this relief measure was completely withdrawn. Since then, the full VAT rate of 19% has again been applied to the consumption of food in restaurants. This is likely to have had an upward effect on price developments. However, after more than a year, the effect of this measure on the rates of change compared to the previous year is no longer recognisable in 2025 (base effect).
Temporary VAT reduction for gas and district heating
VAT on gas (including LPG) and district heating has been reduced from 19 per cent to 7 per cent. The reduction was limited to the period from 1 October 2022 to 31 March 2024. The utilities were asked to pass on the tax reduction to consumers accordingly. It has been and will be taken into account in the price measurement and will have a dampening effect on the respective price development for gas (including LPG) and district heating. The actual impact on consumer prices can only be roughly calculated, as market prices for gas and district heating are currently very dynamic and partly offset or even overcompensate for the dampening effect. In addition, the reduction in VAT for LPG took effect as a supplement in November 2022, but retroactively for October 2022. Due to the late legal implementation, however, the tax reduction was not included in the price measurement in October 2022, but only in November 2022.
As of 1 April 2024, the reduced tax rate of 7 per cent was no longer applied on gas (including LPG) and district heating. Since then, the regular 19 per cent has been due again, which is likely to have had an upward effect on prices.
Besides that, in the international context, many relief measures have been introduced with an effect on consumer prices.
Eurostat, the statistical office of the European Union, listed these measures according to the effect on the HICP in the following document: