Germany will cut sales tax on gas to 7% in an effort to cushion the impact of additional charges being imposed on consumers to ensure energy companies can afford increasingly expensive supply, the chancellor said on Thursday. Olaf Scholz.

The reduced tax rate will be in effect as long as the tax is applied, that is, until March 2024, Scholz added.

Germany had been in talks with the European Commission this week to find another way to reduce the cost burden for consumers, after the commission said Germany’s offer of a value-added tax exemption was not possible.

The move comes after taxes were announced this week that will add hundreds of euros to the energy bill of an average family.

The levies will be imposed from October 1 in a bid to help Uniper, the country’s largest importer of Russian gas, and other importers cope with rising prices.

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