German states want further energy price relief, stress security advantage of renewables

Amidst the growing energy crisis triggered by the US and Israeli war on Iran, energy ministers from 15 German states have outlined a number of key demands from the federal government to ensure energy supply security and maintain affordable petrol prices for consumers. 

In a joint statement, the state ministers welcomed the federal government’s efforts to control price hikes at petrol stations through legislation and plans to use antitrust law to review the pricing policies of gas and oil companies. However, they called on the government to also enact a reduction of the electricity tax for all consumers, as well as to examine further measures to mitigate the impacts on the population and the economy. The government parties promised a general reduction of the electricity tax in their coalition agreement, but have only introduced the measure for businesses until now and excluded households, citing budget constraints. 

The state ministers also underscored the importance of renewable energy for increased security of supply and called for its further expansion as well as the transformation of industrial and production processes through the use of economically viable green energy resources.

The ministers’ demands follow the federal government’s adoption of a fuel measures package passed at the end of last week and aimed at controlling price hikes at the petrol pump by prohibiting petrol station operators to raise prices multiple times within a single day. The ban is set to take effect on 1 April, Handelsblatt reported. Under the new rule, which aims to limit price fluctuations and ensure greater transparency, gas stations will only be allowed to raise their prices once a day, at noon.

Meanwhile, several states presented a resolution in the federal council of states governments (Bundesrat), proposing to skim off "excess profits" from oil companies during the energy crisis and use them specifically for relief measures and structural reforms to ensure a secure and affordable energy supply. Federal economy minister Katherina Reiche, however, has rejected calls for a profit tax to curb high fuel prices. In an interview with Bild, Reiche said the plan could be unconstitutional. 

The federal government and state leaders are pressured to relieve companies and households through fiscal measures amidst growing concern about the war’s impact and soaring energy prices on Germany’s economy.