Austria extends fuel price cap to ease cost-of-living pressures

Austria’s government has extended its fuel price cap to help drivers cope with rising costs. The measure comes as part of a broader effort to ease financial pressure while balancing tax revenue from higher fuel prices.

The decision was backed by the ruling coalition, which includes the ÖVP, SPÖ, and NEOS parties. The fuel price cap was first introduced in early April after sharp increases at petrol stations. At the time, prices had surged due to global market instability, including tensions linked to the Iran conflict. Though current fuel costs remain higher than before the conflict, they have dropped from the record levels seen in March and April.

From June, the government will no longer enforce a full price cap. Instead, it will reduce the mineral oil tax by 1.7 cents per litre, a change set to last until the end of June. Gas stations must still pass on any price reductions to customers until the end of August.

The Austrian Federal Economic Chamber supported the move, particularly the decision to avoid further restrictions on profit margins. Officials argued that limiting margins would create unnecessary interference in the market. The tax adjustment also aims to offset increased VAT revenue generated by higher fuel prices in recent months. The extension of the fuel price cap and the tax reduction will remain in place for now. Drivers will continue to see some relief at the pump, though prices stay above pre-conflict levels. The government’s approach balances consumer support with fiscal considerations.