Government coalition debates “mobility bonus” to cushion rising fuel prices

The German government coalition partners are debating ways to lower the burden on citizens as energy prices have increased substantially over the past months, reports German tabloid Bild. While the Social Democrats (SPD) and the Green Party had rejected a proposal by Germany’s finance minister Christian Lindner (FDP) for a blanket reduction of the price for petrol, financed through the state budget, the government is now considering a “mobility bonus”. The SPD proposed this monthly payment to lower-income households, and the amount would depend on the income, writes the newspaper. However, it remains unclear how the money can be distributed, because the country lacks a system via which all residents could be paid. This is also a hurdle to the so-called “energy bonus” (“Energiegeld”) to pay back revenues of the national carbon price on transport and heating fuels to citizens, which the coalition had promised to consider. It is unlikely that this bonus would be introduced in the near term, economy and climate minister Robert Habeck told public broadcaster ARD. Coalition representatives meet again on Monday (21 March) and SPD general secretary Lars Klingbeil said he expected the government to come to an agreement this week, wrote Bild.

Europe is experiencing new extremes in energy price hikes, caused by strong demand for natural gas during the economic recovery from the pandemic and exacerbated by Russia’s war against Ukraine. Seeing households and businesses faced with inflated energy bills, almost all European governments have introduced relief schemes to help consumers afford the expensive fossil fuels to heat their homes.