Oil embargo must not lead to regional price differences at German petrol stations – chancellor Scholz

German chancellor Olaf Scholz has assured the country’s eastern states that they will receive support in dealing with the fallout of an embargo on Russian oil supplies. In a speech at the East German Economic Forum, Scholz said an embargo “must not lead to massive regional price differences at the petrol pumps. For me, this is a question of solidarity. We all bear the costs of this war together.” Eastern German states could be hit especially hard, as refineries here are more or less directly connected to Russian oil supplies.

The chancellor also talked about the role eastern German states can play in the country’s energy transition. Scholz said the eastern German business locations competed “in the world league,” such as Grünheide with Tesla’s gigafactory. As Germany aims to remain an industry location while becoming climate neutral by 2045, the availability of renewable energies is a decisive locational advantage, Scholz said. “Eastern Germany has the land and the meteorological conditions it needs for the massive expansion of renewables.” However, this also requires local acceptance. “We will not make progress with a ’not in my backyard‘ attitude,” he said.

At the same conference, economy minister Robert Habeck said making eastern states an “economic magnet” would have effects beyond the country, and help tying in countries like Poland and the Czech Republic. “Then the force that Europe needs now– cohesion -- will emerge,” Habeck said.

The eastern states of Germany still economically trail behind western regions three decades after reunification. However, major companies involved in efforts to decarbonise economic sectors, such as Tesla or battery manufacturer CATL, have decided to open locations in the east, often citing the availability of renewable electricity as a key factor in their decision.