Merz confidante backs tax cuts as German fuel prices hit record

As international oil prices have climbed above $100 a barrel in response to disruption caused by the U.S.-Israeli war on Iran, the cost for E10, the most commonly sold gasoline in Germany, has been at an all-time high for four days in a row.

The nationwide daily average price for a litre of E10 rose to €2.30 ($10.05 per gallon) on Tuesday from €2.286 previously.

BERLIN, Sept 16 (Reuters) - Senior German conservative lawmaker Thorsten Frei, a confidante of Chancellor Friedrich Merz, on Wednesday gave his backing to lowering the sales tax on gasoline, saying it would be an obvious step.

Merz and his government are 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.

Frei told broadcasting group RTL/ntv that lowering an energy tax again, which the government did in May and June, could be one option, as would reducing sales tax to 7% instead of 19%.

Deliberations need to happen fast, he added, and should focus on how to launch measures by October 1.

Merz, who was leading a meeting of the cabinet on Wednesday, did not float any specific measures on Tuesday but promised that proposals were coming "very soon".

He has rejected a windfall profit tax, saying it has no legal basis.

The chancellor is keen to prove that he can act on voters' concerns ahead of state elections in Berlin and Mecklenburg-Western Pomerania on Sunday.