German government agrees fuel tax cut: sources

Germany is poised to cut taxes on fuel for vehicles under an agreement within the country's coalition government, sources said Friday, as Europe's biggest economy grapples with surging prices because of the Middle East war.

The proposed measure would run to the end of the year, and then a ceiling price on fuel sales would come into effect, the sources close to the government told AFP.

The war, pitting the United States and Israel against Iran for the past six months, has seen Tehran impose a stranglehold on the vital Strait of Hormuz, restricting Gulf crude exports.

The situation has worsened with Yemen's Iran-backed Houthis targeting an alternative export route, through the Bab al-Mandab Strait. 

Saudi Arabia's national oil company Aramco has informed at least two European refineries that they will not receive oil shipments next month, according to a Bloomberg report on Friday.

Germany's unpopular Chancellor Friedrich Merz on Tuesday promised to provide solutions for motorists in his country "soon". Different ministers suggested different options to take.

Merz is under intense political pressure after the far right AfD party trounced his centre-right CDU in elections in the German state of Saxony-Anhalt two weeks ago.

On Sunday, two other German states will hold elections, and further losses could deliver a double blow to the embattled leader.