The federal government has pointed to its review procedures regarding possible increases in profit margins at gas stations since the introduction of the twelve o'clock rule. "We have already stipulated in the law that we carry out reviews and of course we also monitor this continuously," a spokesman for the Federal Ministry of Economic Affairs said on Monday in Berlin. According to a study, profit margins for petrol have risen since the rule was introduced on April 1.
The twelve o'clock rule is only one part of the fuel measures package aimed at "strengthening competition in the fuel sector," the ministry spokesman said further. It creates more transparency for consumers. The experiences with the rule would "be evaluated as stipulated in the law, discussed with all market participants after six months and then evaluated again after one year," he explained.
In the study by the Leibniz Centre for European Economic Research (ZEW) and the Institute for Competition Economics (Dice), it states that profit margins for both E5 and E10 gasoline in Germany rose by around six cents per liter after the introduction of the twelve o'clock rule. The effect on diesel prices, however, remains "at least unclear in the short term."
According to the study, prices were "systematically" increased during midday hours through to the evening hours. In the morning hours, they tended to fall below the daily average. Previously, consumers had had numerous opportunities throughout the day to refuel more cheaply.
"The package of measures has not yet succeeded in lowering the price level," explained Dice study author Leona Jung. "Profit margins increased significantly, particularly for petrol." Co-author Leonard Gregor from the Dice Institute added that the twelve o'clock fuel rule makes favorable time windows "more clearly recognizable." On the other hand, higher prices between noon and evening must be accepted.
According to the study, smaller chains and independent providers in particular raised their profit margins more sharply than large gas station chains. Within Germany, the strength of the effect also varies "considerably" - margins rose particularly sharply in southern Germany.
This shows that the reform depends heavily on market structure and competitive intensity. Larger companies in particular raised their margins less sharply, "as they, as dominant market players, are more likely to fear antitrust reviews," explained Dice director Justus Haucap.
The spokesman for the Federal Ministry of Economic Affairs said the study "naturally also presents the situation in a simplified manner." The study cannot "assess what volumes were purchased at the respective prices, only the price at the gas station is known." At the same time, it is a "valuable contribution to also gaining further insights on the topic of price formation."
The Fuels and Energy Industry Association (en2x) stated it could not "comprehend the study's conclusions." Higher prices do not "automatically mean higher profits," the association explained. In practice, there are "numerous factors that influence the price, the twelve o'clock rule is only one of them."
The industry is currently struggling with "increased logistics costs, a regional oversupply of petrol and currently the tightening" of the greenhouse gas reduction quota, the association further explained. "More climate protection in transport is right, but that burdens the margin and is not taken into account in the study." Experience also shows that people "overwhelmingly refuel at price valleys."
For the ZEW and Dice study, data from around 15,000 gas stations were analyzed in the period two weeks before and after the new fuel price regulation came into force. To calculate profit margins, the researchers compared fuel prices minus taxes and fees with wholesale prices from the European trading region Amsterdam-Rotterdam-Antwerp (ARA price).
Since April 1st, gas stations in Germany may only raise prices once per day, specifically at twelve noon. They are permitted to lower prices at any time. The aim is to reduce short-term price fluctuations at the pumps. The federal government stated it wanted to "restore consumer confidence in prices at the pumps and strengthen competition." However, the regulation does not change the situation on global energy marke
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