Fuel prices at a record high: dispute in the coalition over relief

What the relief will actually look like is still unclear on Tuesday afternoon. Some SPD politicians are calling for a state price cap, similar to that in force in Luxembourg. There, the Ministry of Economic Affairs sets a daily adjusted maximum price based on a specific formula that reflects developments on the crude oil markets. “Such a system allows downward price competition, but has an upward cap and costs the state nothing,” the deputy SPD parliamentary group leader Armand Zorn.

The Union warns against intervention in the market. Economics Minister Katherina Reiche, for example, rejects a price cap. It sticks to its proposal to provide direct payments to certain population groups. “A corresponding tool is available,” said the CDU politician in an interview with RTL/ntv. This is a way to provide quick and targeted relief.

However, the SPD-led Finance Ministry has expressed concerns. There is such a direct payment mechanism. But only around 19 percent of taxpayers have the IBAN, as a spokesman said.

So the situation is not easy. Many economists do not believe that a return of the fuel price cap that applied in May and June makes sense. It also cost the state at least 1.6 billion euros – for a relatively short period of time.

Meanwhile, prices at gas stations reached new record highs at the beginning of the week. The nationwide daily average for E10 gasoline was just under 2.29 on Monday. This is a new all-time high, as the ADAC announced. Diesel cost an average of just over 2.41 euros on Monday - that's just a few cents away from the record price that was set in the spring as a result of the Iran war.

Since April 1st, the oil companies have only been allowed to increase prices once a day, exactly at 12 p.m. The federal government decided on this measure in order to calm the market, prevent hectic price jumps at the pumps, sometimes every minute, and create more planning security for consumers.