Fuel prices in Germany have surged sharply as a result of the Iran war, and the German parliament has now moved to bring greater predictability and transparency to the nation's forecourts. The Bundestag voted by a majority on Thursday in favour of a package of measures put forward by the governing coalition of the CDU/CSU and SPD, which would restrict petrol stations to raising fuel prices no more than once per day. Whether the measures will prove sufficient continues to be a subject of intense debate.
Under the new framework, petrol stations would be permitted to increase fuel prices only at noon each day, following the model already in place in Austria. Price reductions, however, may continue to be made at any time and at any frequency. Operators who violate the rule face fines of up to €100,000.
The package also includes provisions to tighten competition law. Federal Economics Minister Katherina Reiche (CDU) stated following the Bundestag vote: "We are strengthening the Cartel Office by reversing the burden of proof. Mineral oil companies must now demonstrate why they are raising prices and what the pricing structure looks like." In addition, the measures are designed to make it easier to involve the Cartel Office more quickly when violations occur.
"We are not only taking the concerns of citizens seriously, we are acting," Reiche said. She added that the federal government and the Bundestag had acted "swiftly, in a targeted manner, and with measured proportionality."
Following its passage in the Bundestag, the package will now go before the Bundesrat on Friday. The legislation is initially set to apply for a limited period and is to be evaluated after one year. According to the Federal Ministry for Economic Affairs, the measures could come into force as early as April.
However, even Economics Minister Reiche herself has expressed doubt over whether the measures will be enough to cushion the economic and consumer burdens arising from the conflict in the Middle East. She acknowledged that, should the crisis persist, the fuel price package "may not be sufficient."
She added that she was therefore "very open to considering whether we should temporarily increase the commuter tax allowance," stressing that "it is important that we send a signal to those who depend on their cars."
The German Mittelstand Association (DMB) said on Thursday that the fuel measures package could "only be the symbolic starting shot for a larger relief package." A recent member survey conducted by the association showed that more than 90% of the 450 mid-sized businesses surveyed reported "a sometimes dramatic spike in energy and fuel costs" since the beginning of the Iran war.
More than half of respondents described this as "a significant or even critical burden" on their ongoing business operations.
"When petrol station operators are only allowed to raise prices once per day, that creates transparency and planning certainty, not least for the Mittelstand, which is severely affected by the current crisis," said association chairman Marc Tenbieg. He cautioned, however, that the package would "in all likelihood not lead to fuel becoming cheaper again in the short term."
He called for further action, including tax relief measures to create new investment capacity for businesses, and stressed that the energy transition must be pursued consistently in light of Germany's dangerous dependence on fossil fuels.
Further steps were also called for on Thursday by Saxony-Anhalt's Minister-President Sven Schulze (CDU) and Mecklenburg-Vorpommern's Minister-President Manuela Schwesig (SPD). Schulze named the CO₂ levy and VAT as potential levers for relief, speaking on ARD's Morgenmagazin, while Schwesig called for a reduction in energy taxes. Minister Reiche, addressing discussions around the electricity tax and broader energy price reductions, said it would be necessary to examine "whether there is fiscal room in the budget for that."
The course of the debate is also likely to depend significantly on how long the Iran war continues. The Fuels and Energy mineral oil association warned of potential supply shortages should the conflict in the Middle East drag on. "Should the blockade of the Strait of Hormuz not ease noticeably in the near future, the global competition for available crude oil and petroleum product supply will intensify," the association's spokesperson told the Rheinische Post. In that scenario, they warned, "the supply of Europe, and therefore Germany as well, could be seriously affected."
From breaking news to thought-provoking opinion pieces, our newsletter keeps you informed & engaged.
