Fuel prices: Reiche's plan for fuel price caps includes hurdles

The coalition leaders have agreed that a fuel price cap should come into effect by the beginning of 2027 at the latest. The Ministry of Economic Affairs is first presenting plans.

Berlin. Federal Economics Minister Katherina Reiche (CDU) is planning restrictions on the planned fuel price cap. The draft law sets out “objective requirements” for the use of the instrument, as the German Press Agency learned from the Ministry of Economics.

The decisive factor should therefore be a price increase that is significantly above the European average over three consecutive weeks. In addition, the maximum price regulation should be limited to a maximum of three months. If there is an impending threat to security of supply, their application could be suspended.

The implementation proposal should create the basis for effectively using the agreed fuel price cap in the event of a crisis - and at the same time ensure the reliable supply of fuel to the population and the economy.

The draft is in so-called early coordination - this is the first step of coordination within the federal government. The portal “The Pioneer” and “Handelsblatt” first reported on the plans. Accordingly, the law should come into force on January 1, 2027.

“Don’t endanger security of supply”

The aim of the draft law is to be able to effectively limit “extraordinary fuel price increases” that go well beyond European price developments while ensuring the supply of gasoline and diesel at all times, it said.

What is crucial for the design is that a price limit should not endanger security of supply - Reiche had repeatedly pointed this out.

The ministry said: "If maximum prices are set too low, fuel deliveries could become uneconomical. Imports could fail and supply bottlenecks could arise." It should be ensured that fuel deliveries remain economically possible even if the government limits prices.

Price cap should be “due to the crisis”.

In mid-September, the leaders of the black-red coalition agreed to hold talks with the oil industry - with the aim of introducing a fuel price cap based on the example of Luxembourg or Belgium by January 1, 2027 at the latest.

This should be “not permanent” and “crisis-related”, it was said with a view to the Iran conflict, which triggered price jumps. It continued: "Security of supply must be guaranteed. Abusive price markups must be prevented." The fuel discount expires at the end of December.

Shortly before the coalition committee's decision, Reiche said that she thought a price cap was the wrong approach. Such a cap would weaken the medium-sized refining industry: “We urgently need our refineries because they produce diesel, gasoline, heating oil and kerosene in Germany.”

Countries should be able to set different maximum prices

The fuel price cap should take into account the different regional market and supply conditions, as the ministry said. Procurement and transport costs as well as the competitive situation differed significantly within Germany. A nationwide maximum price could therefore have different effects regionally.

The draft should allow countries to set different maximum prices to take local conditions into account. “This regional differentiation is an essential part of an effective and secure implementation of the fuel price cap.”