Germany fuel tax cut agreed, sources say

Germany's coalition government has agreed to cut taxes on vehicle fuel, sources close to the government told AFP on Friday, as Europe's biggest economy faces surging prices linked to the Middle East war.

The proposed tax cut would run until the end of the year. After that, a ceiling price on fuel sales would take effect, the sources said.

The war between the United States and Israel on one side and Iran on the other has disrupted Gulf crude exports through the Strait of Hormuz. Yemen's Iran-backed Houthis have also targeted an alternative export route through the Bab al-Mandab Strait.

Bloomberg reported Friday that Saudi Arabia's national oil company Aramco had informed at least two European refineries that they would not receive oil shipments next month.

German Chancellor Friedrich Merz promised Tuesday to provide solutions for motorists "soon". The sources' account of the coalition agreement followed different proposals from ministers on how to respond to fuel prices.

Merz is under political pressure after the far-right AfD defeated his centre-right CDU in elections in Saxony-Anhalt two weeks ago. Two other German states are due to hold elections on Sunday.