Katherina Reiche: SPD sets a deadline for the economics minister to cap fuel prices

Economics Minister Katherina Reiche's office, which has traditionally been extremely skeptical of market interventions, has had a rather half-hearted proposal for a cap drawn up that will probably never take effect. Instead of the regulation being passed in the cabinet, there is now a dispute between the coalition partners CDU/CSU and SPD.

“We expect Federal Economics Minister Reiche to present a concrete proposal for a fuel price cap next week that will apply when people go on their Christmas holidays,” said SPD parliamentary group deputy Armand Zorn to the dpa news agency. »We will not accept a law that stipulates that people have to endure three weeks of historic price increases in January before the cap even takes effect. And it can’t be the case that this will be invalid again at the end of March.”

In other countries, “breathing” price caps have been in place for a long time. In Belgium and Luxembourg, for example, the government has been regularly setting maximum prices for fuel for years. This doesn't prevent high prices per se, but it does prevent excessive markups. Economists, however, warn against a fixed upper limit like the one Hungary once introduced. Fuel became scarce there, there were queues at gas stations, and competition suffered.

According to Lower Saxony's Prime Minister Olaf Lies, the hurdles for a German price cap presented by Economics Minister Reiche are far too high. "This draft of a fuel price cap is like insurance that doesn't pay exactly when the damage occurs," said the SPD politician. “Anyone who announces a price cap must also ensure that it works in practice.” Anything else would raise expectations among people that would ultimately be disappointed.

SPD politician Zorn, in turn, said it was time to limit the oil industry's margins. "The crisis is now and we have to act now," he said, referring to price jumps as a result of the Iran conflict. The current fuel discount expires at the end of the year, and it could then become significantly more expensive for consumers. At the gas station, but also because companies are likely to pass on increased fuel costs to end customers.