High fuel prices: debate about relief and new proposals

So far there has only been a vague announcement: two days ago, Chancellor Friedrich Merz promised relief due to high fuel prices. The Chancellor left it open as to what exactly was to come and when. But the pressure is increasing. According to the ADAC, after petrol, diesel is now more expensive than ever before. On Wednesday, a liter cost a nationwide daily average of 2,453 euros, surpassing the previous record from April.

Union parliamentary group leader Thorsten Frei believes a quick decision on relief is feasible. “I believe that if you do this quickly now, it can be achieved by October 1st,” said the CDU politician on the ARD program maischberger. This is ambitious, but it has already worked in the past, Frei made clear with a view to the fuel discount in the spring. "If we work closely together, including in parliament, then that is an opportunity."

Frei suggests a new fuel discount

The parliamentary group leader of the CDU and CSU in the Bundestag also commented on the possible options. Frei called for a further reduction in energy tax based on the model of the fuel discount in May and June, as well as a reduction in VAT on fuels.

Before Frei, Economics Minister Katherina Reiche had already spoken out in favor of a temporary reduction in VAT. The tax on fuels should be reduced from 19 to 7 percent, said the CDU politician on the sidelines of the G20 energy ministers' meeting in Houston (USA). This would work directly at the pump and relieve the burden on citizens and the logistics industry.

SPD has other ideas

This would cost the state several billion euros. The path is therefore controversial in the coalition. The SPD favors a so-called excess profits tax for oil companies - i.e. skimming off special profits through high prices. This additional money could be used to finance relief.

Another proposal from the ranks of the SPD: the introduction of a fuel price cap. With this variant, binding maximum prices for gasoline, diesel and heating oil could be set based on price developments on international markets. Economics Minister Reiche rejects both options.

Economist advocates direct payments

The CDU politician has instead renewed her proposal for direct payments from the state to low-income earners. This is met with approval by experts. “It would be far more sensible than the fuel discount,” said Georg Zachmann, economist and energy expert from the Brussels think tank Bruegel, in the daily topics. "Direct payments to people who really need it mean that gasoline prices continue to be high. This means that people drive cars less, less of the scarce gasoline is used and that makes far more economic sense than the fuel discount."

This “cost a lot of money” in May and June and didn’t reach the right people. It is similar with a reduction in VAT. This is the “little sister of the fuel discount” because it has the same problems. “I think that direct payment is by far the most economically sensible,” said Zachmann.