Germany: Merz announces relief measures for high fuel prices

German Chancellor Friedrich Merz today announced relief measures for high fuel prices, though without mentioning specific interventions.

“Yes, we will react to the price increase (…) I believe we must take action. The proposal will come very soon,” Merz said, clarifying that the “exact instruments” had not yet been finalized. “We are in intensive consultations between the federal government and the states, and you can expect us to present a proposal very soon,” the chancellor added, speaking at the BGA business association conference in Berlin.

Referring to accusations that oil companies are exploiting the crisis, Friedrich Merz pointed to the Federal Cartel Office.

Yesterday the price of gasoline averaged 2.32 euros per liter, while diesel cost 2.44.

Economy Minister Katharina Reiche (CDU) has proposed targeted relief for specific population groups through direct payments. However, not everyone in the governing coalition agrees with the proposal, not even within her own party. CDU politician Sebastian Steinke, for his part, has called for a temporary reduction of energy taxes to the “European minimum” and suggested adjusting German CO2 prices. “We need to reconsider this. We must be careful that climate protection does not lead to excessive social burdens,” he said in an interview with Handelsblatt.

In opposition, Alternative for Germany (AfD) has proposed a permanent reduction of taxes and duties on fuel. “The AfD parliamentary group has submitted exactly this proposal to the Bundestag: to lower the energy tax on natural gas, gasoline and diesel to the EU minimum, abolish the CO2 tax and reduce VAT,” Leif-Erik Holm, the AfD’s lead candidate in Sunday’s state elections in Mecklenburg-Western Pomerania, told Handelsblatt.