First draft revealed – Reiche wants to link fuel price caps to foreign prices

Federal Economics Minister Katherina Reiche (CDU) wants to link the fuel price cap agreed in the coalition to price developments in other European countries. This emerges from the first draft law from her ministry, which several media outlets quoted on Monday. Accordingly, a legal basis for a price cap should be created, but this will not be introduced automatically.

According to the draft, various exceptions to the fuel price cap should also be provided. A state maximum price must “remain strictly limited in time,” Politico quoted from the draft. The law does not automatically introduce a price cap, but rather first creates the legal possibility of doing so.

The black-red coalition agreed in September that the Ministry of Economic Affairs should develop a price cap for the period from January. The fuel discount, which reduces taxes on petrol and diesel, is still valid until the end of the year. A lid should then ensure lower prices at the petrol pumps. The SPD in particular campaigned for this.

Economics Minister Reiche, on the other hand, made no secret from the start that she was not in favor of such a measure. Her ministry said that setting an appropriate price cap nationwide would hardly be feasible. A cap that is too high could lead to higher prices, while a price cap that is too low could endanger security of supply in remote regions, for example, because business there would no longer be worthwhile.

The coalition's agreement explicitly states, with reference to security of supply, that the fuel price cap should be developed together with the petroleum industry. However, according to Politico, she refuses to cooperate. A coordination between associations and companies on this could be viewed as “inadmissible price fixing,” “Politico” quoted in an earlier report from a letter from several associations to the Federal Ministry of Economics.

According to Politico, a further fuel discount is excluded in the draft due to the budget situation. An excess profits tax, as Federal Finance Minister Lars Klingbeil (SPD) is calling for at EU level, is “not legally secure and immediately effective in the short term,” it said.