German govt aims to curb petrol price hikes amid Iran war

The German government plans to introduce legal barriers to prevent sharp petrol price hikes by limiting daily increases and ordering mineral oil retailers to justify prices changes at the pump. Proposed changes to Germany’s cartel law would limit how often petrol station operators can raise prices, allowing a single price increase per day - at midday - and only after operators provide a causal explanation for the increase, news agency Reuters reported in an article published by news site Der Spiegel. 

“Price decreases are admissible at any time,” a government spokesperson said. According to the report, the reformed cartel regulation should be passed within the next week and remain in place until summer, the article said.

Petrol prices worldwide have spiked following the US-Israeli-led war on Iran, which has caused wider disruptions in the Persian Gulf region, a key hub of the global fossil fuel industry. Tomas Duso, a member of Germany’s monopoly commission, said prices in the country had risen more sharply than in other European countries, which he said pointed to “structural problems” in the fossil fuel sector. Mineral oil companies in Germany have previously faced criticism for quickly raising prices after market disruptions but passing on price decreases more slowly.  

Petrol prices at the pump had risen to above two euros per litre in Germany after the war on Iran began at the end of February, the highest level since the 2022 energy crisis that was fuelled by Russia’s invasion of Ukraine. The new price hikes have reignited a debate about consumer relief and potential profiteering by energy companies during geopolitical crises. They have also raised concerns about higher inflation that could hamper Germany’s economic recovery. The government had greenlighted the release of strategic oil reserves in line with other countries to ease pressure on oil markets. 

Meanwhile, higher petrol prices appear to be boosting interest in electric vehicles (EVs) in Germany, news agency dpa reported in a recent article published by business daily Handelsblatt. Online car retailer platforms Carwow and Meinauto.de both said that users had increasingly requested information on EVs since the start of the Iran war.