Germany's Reiche drafts fuel price cap that only triggers after three weeks of steep gaps versus EU average

In brief

• Economy Minister Katherina Reiche's first draft would allow a fuel price ceiling only as a last-resort crisis tool.
• The cap would trigger only if petrol and diesel run more than five percentage points above the EU average for three straight weeks.
• The ceiling would be limited to three months and could be suspended if supply security is threatened; the SPD calls it too weak.

Trigger conditions in the draft

The Federal Economics Ministry has completed a first draft of a law on maximum fuel prices, which is being called the Kraftstoffhöchstpreisgesetz. According to the draft, the government could set a price ceiling for fuel sold at public filling stations by ordinance, but only as a last-resort crisis tool. (Ministerin Reiche legt ersten Entwurf für Spritpreisdeckel-Gesetz vor – tagesschau.de)

The trigger is strict. Petrol and diesel would both need to rise more than five percentage points above the average price increase of the other EU states, in each of three consecutive weeks. The figures would come from the European Commission. (Energie - Reiche plant Kraftstoffpreisdeckel nur bei hohen Preissprüngen – Deutschlandfunk)

Time limit and suspension

According to the draft, the ceiling would last no longer than three months. If supply security were at risk, its use could be suspended.

Political reaction

SPD parliamentary group spokesman for economic policy Roloff said the proposed rules fall far short and would not curb what he called windfall profits of the oil industry. He pointed to Belgian and Luxembourg laws, which he said work without the many exemptions and hurdles in the German version. (Energie - SPD kritisiert Reiches Entwurf für Preisobergrenze an Tankstellen – Deutschlandfunk)

How often it would have applied

News agency AFP calculated that the rule would never have taken effect during the recent price rises.

Status

The draft is in the early inter-ministry coordination stage. Reiche is not a supporter of a fuel price cap, but the coalition wants to introduce the instrument. (Katherina Reiche (CDU) formuliert erste Pläne für Spritpreisdeckel – DER SPIEGEL) The Economics Ministry confirmed the draft is under inter-ministerial review and declined to give further details.

The background is the sharp rise in fuel prices since the start of the Iran war.