Germany to tighten antitrust law as fuel tax cuts fail to bring price relief

German economy minister Robert Habeck has said that the government intends to tighten the country’s antitrust law amid concerns that oil companies do not pass on a tax cut on fuels to consumers. The government has lowered taxes on fuels for the months of June, July and August as part of a larger relief package to help citizens deal with rising energy prices, exacerbated by Russia’s war against Ukraine. However, data from the first days indicated that the gap between pump prices and crude oil prices had increased sharply, Habeck told news magazine Spiegel. “What many experts had warned about has come to pass: The mineral oil companies pocket the profit, consumers feel nothing of the tax reduction,” Habeck said. The minister said he aimed to give the Federal Cartel Office more powers and introduce an “antitrust law with claws and teeth,” he told public broadcaster Deutschlandfunk. The antitrust authority should, for example, be able to access more data from the mineral oil companies in order to gain insight into their pricing practices. In addition, it should become easier to skim off profits when companies abuse their market power. As a last resort, it should also be possible to break up companies. But reforming the legislation will take time and does not present a short-term measure to deal with the current pricing by oil companies, he added.

The fuel discount by the government has been contentious from the start, and many researchers and NGOs have voiced their opposition for various reasons. It would encourage greater use of fossil fuels, is targeted at mid to high-income consumers and enables oil companies to make windfall profits. The companies say that high procurement costs due to the tense situation on world markets are responsible for petrol prices not falling as expected, writes Spiegel.