German parliament moves to curb fuel prices in wake of Iran war

Deborah Cole

in Berlin

Germany’s parliament is taking unusual action to curb fuel prices in the wake of a spike from the Iran war.

Under a draft law set for approval by the Bundestag lower house on Thursday, petrol stations will only be able raise prices once a day, at 12 midday. They may be reduced at any time. Businesses violating the rule can be fined up to €100,000.

Watch for angry scenes in the queue at 11.55 am.

After topping the list of EU countries with the highest rise in pump prices early on, Germany remains among the countries whose motorists are bearing the biggest brunt of the surge.

Compared to the week before the US-Israeli military action, prices had increased by 27 cents per litre for petrol and 42 cents for diesel, above the EU average of 20 cents/litre for petrol and 36 cents for diesel, according to EU Commission figures compiled by Monopolkommission, an independent economic advisory body to the German government.

It attributed the rapid rise in fuel prices in Germany to heavy market concentration.

The legislation before the Bundestag will also give the Federal Cartel Office expanded powers to fight price gouging.

Armand Zorn, deputy chair of the Social Democrats parliamentary group, accused the industry of profiteering.

“We do not have a supply problem in Germany, but a clear pricing problem,” he told Bild newspaper. In hardly any other European country had such steep profits been made at the expense of consumers during the crisis, Zorn said.

But market watchers are divided whether the high noon rule, due to go into effect in early April for at least a year after passing the Bundesrat upper house, will do much to help consumers.

The Federation of German Industries (BDI) criticised the planned tightening of antitrust law and the speed with which it is being pushed through.

“The federal government is introducing far-reaching and risky changes to competition law through a rushed fast-track procedure,” said Holger Lösch, deputy chief executive of the BDI. He said that was creating uncertainty among businesses and jeopardising investment across sectors.

“Without involving industry and without a broad public debate, rules are being changed under the pressure of high fuel prices that go far beyond the current situation and would permanently alter the playing field for all companies,” Lösch said. “This intervention in competition law threatens to do a disservice to the entire economy in terms of regulatory policy.”

Prices in recent weeks had been particularly volatile as well as generally elevated so advocates cite a calming effect that will kick in simply due to more predictability and transparency.

The stakes are high for the ruling coalition partners, chancellor Friedrich Merz’s Christian Democrats (CDU) and the Social Democrats.

The parties are running neck-and-neck in a key state election on Sunday in Rhineland-Palatinate, two weeks after the CDU lost to the Greens in the car manufacturing region of Baden-Württemberg by a whisker.

The parlous state of the German economy, the EU’s biggest, and inflation fears driven by the Iran war and US tariffs will be at the front of voters’ minds.