German Economy Minister Reiche's fuel price cap draft criticized over high hurdles

The plans for a fuel price cap put forward by Economics Minister Katherina Reiche (CDU) have drawn sharp criticism — including from within the SPD. SPD deputy leader Anke Rehlinger is calling for the draft to be revised.

Show in an electric car, gravel for the oil corporations: Minister Katherina Reiche's (CDU) agenda. Photo: pictureteam/imago

By Anja Krüger

The draft law for a fuel price cap presented by Federal Economics Minister Katherina Reiche (CDU) has met with harsh criticism — including from the SPD. Saarland Minister-President and SPD deputy chair Anke Rehlinger is demanding that the draft be revised.

Fuel prices rose drastically as a result of the Iran war. The federal government therefore cut the energy tax on petrol and diesel, first in the spring and then for the last three months of this year. This is the so-called tank discount. According to studies, the oil companies raised prices far more than was justified given the global market situation and thereby raked in billions in so-called excess profits. They do not pass the tank discount on in full.

In September, the Union, SPD and the federal states agreed that the federal government would hold talks with the mineral oil industry "with the aim of introducing a fuel price cap modelled on Luxembourg or Belgium by 1 January 2027 at the latest". In those countries, the state generally sets a ceiling for petrol and diesel prices. Reiche's draft does not provide for this, however.

Under her plans, there would be no price cap at all following the tank discount, which expires on 1 January. Her draft law merely creates the legal basis for introducing one. "The federal government shall be authorised to set maximum prices for the sale of petrol or diesel fuel to end consumers at public filling stations by statutory ordinance without the consent of the Bundesrat," the draft states. The hurdles for introducing one are extremely high, however: it could only be introduced if prices in Germany rose by 5 percentage points more than the EU average for three consecutive weeks. This has not happened in the past ten years.

Rehlinger: Cap Without Effect

There is considerable discontent within the SPD over the draft. "The Federal Economics Ministry has pulled all the teeth from the fuel price cap," SPD deputy leader Rehlinger told the taz. "This draft law cannot bring relief to motorists, which is why it must be revised." It is "recognisably designed" so that the fuel price cap would never take effect. That is not what was agreed.

Sebastian Roloff, economic policy spokesperson for the SPD parliamentary group in the Bundestag, is also calling for improvements. The fact that there will be no fuel price cap on 1 January is neither something that can be communicated to nor reasonably expected of the people and companies suffering under high prices, he said. "Minister Reiche must decide whether she wants to relieve the burden on citizens and small and medium-sized businesses, or whether she wants to be the patron saint of the oil companies' rip-off profits," he stressed.

The Federal Finance Ministry, led by SPD leader Lars Klingbeil, declined to comment on the draft law, citing ongoing internal government consultations.

Opposition Calls for Excess Profits Tax

The opposition is outraged by the draft. "For consumers, Katherina Reiche's concept will probably turn out to be an ineffective disappointment," said Katharina Dröge, co-chair of the Green parliamentary group in the Bundestag. "Meanwhile, thanks to Ms Reiche's friendly assistance, the oil companies continue to make excess profits." Dröge is calling for an excess profits tax "that returns the corporations' billions in profits to the people."

The Left party faction in the Bundestag sees Reiche's draft as "aiding and abetting highway robbery." The minister is sabotaging the mandate of the coalition decision on the fuel price cap, said faction deputy chair Janine Wissler. "In doing so, she is siding with the oil companies, which are making billions in excess profits on the backs of the people," she said. The Left party is also calling for an excess profits tax.

According to the current schedule, the draft is to be adopted by the cabinet on Wednesday. The Federal Economics Ministry also declined to comment on the criticism, citing internal government consultations.

Related articles:

• High Prices for Petrol and Diesel: Reiche Plans Fuel Price Cap Only for Sharp Price Jumps
• Exploding Oil Price: Even Poland's Conservatives Want an Excess Profits Tax