German economy minister calls for temporary VAT cut on fuel

BERLIN, Sept. 16 (Reuters) - German Economy Minister Katherina Reiche said on Wednesday that it would be sensible to temporarily reduce VAT on fuel from 19% to 7% to help consumers shoulder a spike in fuel prices.

"It could address the burden where it is felt directly: at the petrol pump and it would take effect immediately upon introduction," Reiche said, speaking on the sidelines of the G20 energy ministers meeting in Houston, Texas.

The government of Chancellor Friedrich Merz is attempting to address record-high prices at the pump ahead of a state election at the weekend whose outcome could increase pressure on the chancellor to step down.

Reiche said a cap on fuel prices would be the wrong approach and also opposed a windfall tax on energy companies.