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

A last-minute deal keeps fuel costs in check—but for how long? The coalition's compromise offers temporary relief amid rising prices.

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1 min read
The image shows a graph on a white background with text that reads "fuel prices in the United...
The image shows a graph on a white background with text that reads "fuel prices in the United States". The graph is composed of two lines, one in blue and one in green, that represent the prices of fuel in each state. The blue line is steadily increasing, indicating a decrease in fuel prices over time. The green line is slightly higher than the blue line, indicating an increase in prices. The text is written in a bold font and is centered on the graph.

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

The government has extended its fuel price cap, preventing an automatic expiry on Sunday, 28 May. The decision follows an agreement between the ruling coalition parties—the ÖVP, SPÖ, and NEOS—reached over the weekend. Officials say the move will help drivers as fuel costs remain high. Under the new rules, gas stations must continue passing on price cuts linked to global market trends until the end of August. Economic Affairs Minister Wolfgang Hattmannsdorfer (ÖVP) called it a structured phase-out of margin controls rather than an abrupt end.

From June, the only remaining support will be a 1.7-cent reduction in the mineral oil tax, initially lasting through the end of the month. This cut aims to offset the state’s extra VAT revenue from rising fuel prices. Finance Minister Markus Marterbauer (SPÖ) explained that the tax relief directly lowers costs for drivers by returning some of the increased VAT income.

The original price cap, which included stricter profit margin limits, would have lapsed without this deal. NEOS State Secretary Josef Schellhorn highlighted the coalition’s ability to reach a joint decision despite differing views. The extension means drivers will keep seeing fuel price adjustments based on international trends for another three months. After that, only the reduced mineral oil tax will remain in place. The government has framed the changes as a way to balance support for consumers with fiscal responsibility.

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