The SPD parliamentary group in the Bundestag has called on Economy Minister Katherina Reiche (CDU) to present a concrete proposal for a fuel price cap by next week, to be in place for the Christmas holidays. SPD parliamentary group deputy leader Armand Zorn told the news agency dpa, according to Spiegel, that the SPD expects Federal Economy Minister Reiche to present a concrete proposal next week for a fuel price cap that applies when people travel for the Christmas holidays.
Zorn sharply criticised the deadlines envisaged in the draft bill: “We will not accept a law that stipulates that people in January must first endure historic price increases for three weeks before the cap even takes effect. And it cannot be that this is then supposed to lapse again at the end of March.”
The background is a dispute in the black-red coalition over the design of the price ceiling. Under the draft from the minister’s department — she has traditionally been sceptical of market intervention — the federal government can only intervene if prices for petrol or diesel in Germany rise by more than five percentage points more than the average of the other EU states for three consecutive weeks; this applies separately to petrol and diesel. The maximum price rule is to be limited to a maximum of three months and can be suspended if security of supply is at risk. No concrete price ceiling or relief in cents per litre is envisaged.
“An insurance policy that does not pay out when the damage occurs”
In the view of Lower Saxony’s Minister-President Olaf Lies (SPD), the hurdles miss the reality. “This draft for a fuel price cap is like an insurance policy that does not pay out precisely when the damage occurs,” Lies told “Spiegel”. “Anyone who announces a price cap must also ensure that it works in practice.” Anything else raises expectations among people that will ultimately be disappointed.
There is also resistance from the SPD parliamentary group. Its economic policy spokesman Sebastian Roloff is demanding improvements because the mechanism falls short and does not sufficiently limit the profits of the oil industry; the draft does not correspond to what the coalition agreed, reports teltarif.de. Saarland’s Minister-President Anke Rehlinger (SPD) called the proposal a “fuel price cap prevention law” in an interview with “Tagesspiegel” and demanded an effective cap modelled on Luxembourg and Belgium.
Zorn told “Spiegel” that it was time to limit the margins of the oil industry. “The crisis is now, and we must act now,” he said, referring to price jumps as a result of the Iran conflict.
First review data only in January
Even if the cap is adopted, it is likely to have no effect for motorists at first. The legal basis for maximum prices is indeed to be created on 1 January 2027. According to the current draft, however, an actual price cap could take effect at the earliest in February, reports teltarif.de: the review of price developments is only to begin with the data from the second full week of January, after which the prescribed price increases would have to be established over three consecutive weeks. Even then, the federal government would not be obliged to activate the price cap.
In an analysis of the 18-page draft bill, energy expert Steffen Bukold points out that price increases that occurred earlier play no role. In his example calculation for diesel, a price increase at least 21 cents per litre stronger than the rest of the EU average could be necessary within three weeks. An evaluation by the news agency AFP based on data from the EU Commission shows that the condition would not have been met so far even during the massive price increases as a result of the Iran war.
The draft also provides that the federal states may deviate upwards or downwards from nationwide maximum prices, including for individual districts or postcode areas. The Federal Economy Ministry had explained at the government press conference on 30 October that the price level, transport routes and catchment areas of the refineries made regional differentiation necessary.
A windfall tax on oil companies demanded by the SPD is rejected in the draft as an alternative, as is a further reduction in energy tax because of the strained budget situation, reports the taz. According to preliminary planning, the cabinet was to launch the draft on Wednesday; according to the ministry, however, the paper is still in early coordination, the first stage of consultation within the federal government. According to an internal timetable, the Bundestag and Bundesrat are to pass the law before Christmas.
The coalition of CDU, CSU and SPD agreed in mid-September, at the urging of the Social Democrats, to introduce a fuel price cap modelled on Luxembourg or Belgium from January 2027 if possible, in order to dampen high petrol station prices as a result of the Iran war. Reiche herself had described a price cap as the wrong way before the coalition committee and warned of disadvantages for medium-sized refineries: “We urgently need our refineries, because they produce diesel, petrol, heating oil and kerosene in Germany.”
Until the end of the year, the fuel discount launched in October still applies, a three-month reduction in energy tax on fuels. Including the lower VAT, this results in a calculated relief of around 17 cents per litre, as the taz reports. If the discount expires at the end of the year, refuelling could become significantly more expensive again — at the pump and for companies that may pass on increased fuel costs to end customers.
