Fuel price: now comes the next price hike

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Austrian households are groaning under massively increased prices. Nevertheless, the government is sticking to a further increase in the CO2 tax on fuel.

At the end of November, Finance Minister Magnus Brunner received a letter from Austria’s Energy Agency. The topic is the “fossil fuel energy price index for private households.” Based on the price development for fossil fuels over the past twelve months, the index calculates how much drivers will have to pay for the CO2 emissions they cause in 2024 and whether a so-called “price stability mechanism” will take effect. This correction mechanism is intended to prevent extreme upward and downward swings. If fossil energy costs increase significantly for Austrian households, the CO2 price will be lower. Those affected, therefore, pay less climate tax.

Based on the trend in recent months, the Energy Agency assumes that the price stability mechanism will not be applied. This means the levy will rise from 32.50 euros to 45 euros per tonne of CO2 in 2024. This corresponds to a whopping increase of around 38 percent.

For drivers, this means that from January 1, they will have to pay 13.5 cents in CO2 tax per liter of diesel, 3.7 cents more than now, according to ÖAMTC calculations. An average diesel driver who consumes around 800 liters annually must pay 108 euros in 2024. For owners of gasoline vehicles, the tax will rise by 3.4 cents to 12.3 cents per liter at the turn of the year. On average, that is an additional 98.4 euros per year for refuelling.

The CO2 tax introduced in October 2022 is part of the “eco-social tax reform,” a prestige project by Climate Protection Minister Leonore Gewessler (Greens). This climate tax is raised every year.

A regionally graduated climate bonus has also been introduced as a counterbalance and incentive to drive less by car. This is paid out automatically annually to everyone whose main residence is in Austria. In areas with a well-developed public transport network, this most recently amounted to 110 euros. In poorly developed rural areas, 220 euros

How high the climate bonus will be in 2024 remains to be seen. In any case, the ÖAMTC calls for an increase of 38 percent, i.e., the same amount by which the CO2 tax will rise at the turn of the year.