Government tackles holiday petrol price hikes

Higher petrol prices just as school holidays start could be a thing of the past, with the German government taking steps to stop fuel firms taking advantage of people’s travel plans.

Government tackles holiday petrol price hikes
Photo: DPA

With Easter school holidays starting in much of the country this weekend, motorways were expected to be full across the country.

Adding insult to traffic jam misery, petrol prices have also reached record highs with a litre of Super E10 costing an average of €1.70 in Germany on Thursday.

Germany’s upper house of parliament, the Bundesrat, is discussing new law on Friday which would break the control of major oil companies on petrol prices.

If agreement is found, a proposal will be put to the lower house, the Bundestag after the summer break.

The new proposal requires oil giants to warn of price changes by 2pm of the day before the change, and the new price must remain constant for at least 24 hours.

Prices would be stored in a central public database. In theory, motorists would be able to check the pump prices at stations in their area on their mobile phones.

The idea is specifically to break the hegemony of multinationals Aral and Shell. As Germany’s market leaders, these companies dictate price changes at the pumps. When they raise prices, smaller suppliers generally follow suit within about five hours.

Erik Schweickert, spokesman for the government’s junior coalition partner the Free Democratic Party, told Bild newspaper, “Our aim is to take measures against the racket on the roads as soon as possible. The price of petrol should be directed by supply and demand again – not public holidays.”

“Millions of motorists should no longer be oppressed by the oil multinationals,” said Johannes Singhammer, of the Christian Social Union, sister party to Angela Merkel’s Christian Democratic Union.

The government’s proposal is well-timed to coincide with the highest petrol prices ever seen in Germany – on Thursday a litre of Super E10 cost an average of €1.70 in Germany.

FDP leader and Economy Minister Philipp Rösler also intends to expand the powers of Germany’s cartel authorities to prevent prices being dictated by one or two companies in any given sector.

“We need more clarity and control,” he told Bild. “That’s why I want to give the Federal Cartel Office the tools to uncover possible abuses and to investigate them.”

Coinciding conveniently with the recent petrol price hike, the motorist association ADAC warned this week that traffic jams were expected on several German motorways as Easter school holidays in many parts of the country begin this weekend.

On top of increased domestic traffic, thousands of people are expected to travel through or into Germany from neighbouring countries in what the Auto Club Europa (ACE) described as “the first big travel wave of the year.”

The Local/bk

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German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.


With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.