Actually, the traffic light coalition had sworn to no more night negotiations, no more bazaar deals. Negotiations then continued through the night until morning, and on March 24, a month after the start of Russia’s war of aggression against Ukraine, a pruning package saw the light of day that surprised. But is it well thought out?
Rail traffic can collapse from June because of the rush because of the 9-euro ticket – and immediately scare off rail newcomers. Then rather the car. There are also plenty of relief for their drivers, but here, as with relieving citizens of electricity costs, the pitfalls lie in the fact that the billions could go up in smoke and make companies richer.
According to the ADAC, fuel prices are currently too high. A barrel of Brent oil currently costs 113 US dollars and is approaching the year-to-date high of just under 125 dollars in March, as a result of the war. But in the past few weeks, the price has occasionally been under $100 again, but fuel prices were still around two euros per liter.
In addition, the euro is somewhat stronger against the dollar, which has a favorable impact on crude oil costs, emphasizes the ADAC. “Therefore, there continues to be significant potential for significant price reductions at the pumps.” Experts suspect that the fuel companies are already trying to raise prices excessively in order to benefit from the tax rebate that will start on June 1st – Finance Minister Christian Lindner (FDP), who originally preferred a flat-rate discount of 40 cents per liter with a direct deduction wanted to pay and finally agreed with the SPD and Greens on a reduction in energy tax, must fear that the relief will not arrive one-to-one.
At some gas stations, a liter of Super costs more than 2.30 euros again. According to ADAC, a liter of Super E10 currently costs 2.090 euros on average nationwide. For diesel it is an average of 1.994 euros. Especially at the beginning of the war between the end of February and mid-March, according to the ADAC, Super E10 rose by around 45 cents per liter, and diesel by as much as around 65 cents. This finally led to an agreement on the tax discount: on June 1, the tax discount adopted by the Bundestag and Bundesrat will come into force. The energy tax on motor fuels will be reduced for three months until the end of August. According to the Federal Ministry of Finance, this should make petrol 35.2 cents cheaper and diesel 16.7 cents.
There is no guarantee, also because a few companies dominate the market and the pricing is not transparent. The loss of revenue due to the measure is estimated at 3.15 billion euros for the Treasury. The German freight forwarders were already facing mass bankruptcies. “It would be a disaster if the tank discount fizzled out,” said Dirk Engelhardt, general manager of the Federal Association of Freight Transport and Logistics, to “Bild am Sonntag”. “Relying on the oil multinationals to make diesel fuel cheaper is simply not enough and makes us really angry.”
In the traffic light coalition, responsibility is shifted back and forth. FDP General Secretary Bijan Djir-Sarai says that the Ministry of Economics is responsible and must use the market transparency office at the Cartel Office to ensure “that the tax cut does not peter out”. He is sure that Federal Minister of Economics Robert Habeck (Greens) knows about this necessity. To make matters worse, Habeck warns of shortages at the gas stations – and a rush to the gas stations because of the discount could increase the price of gas due to a shortage of supply. Habeck also warns of this.
The rush could be great, especially in areas close to the border, since according to the ADAC, refueling in Germany will initially be significantly cheaper than Denmark, the Netherlands, Belgium or Switzerland from June. But in addition to the non-transparent pricing, the big unknown is the possible oil boycott by the EU against Russia. Then the price of oil could rise to over 200 US dollars a barrel, say experts – then the tank discount would only be a very small cost reduction.
At the Fuels and Energy trade association, they reject the allegations of cashing in. “For about two weeks there have been increasing bottlenecks in the global gasoline market. The trigger is the USA, where the beginning of the summer driving season meets low stocks in refineries and tank farms,” emphasizes Adrian Willig, managing director of the association, when asked by the Tagesspiegel.
“This has an impact on petrol prices worldwide and therefore also in Germany.” In Germany, this happened just before the start of the energy tax cut. Here, of course, people believe that the discount will be passed on in full to drivers, “due to the intense competition between gas stations,” says Willig.
But he also emphasizes that the discount will not take effect immediately everywhere. “Due to the system of the energy tax, there may still be a transitional period after the start, since the fuel stored at the filling stations on June 1st is still subject to the previous normal tax rate.” A number of economists consider the whole thing to be quite a crazy idea, and that from an FDP minister. “Seldom have false incentive and distribution effects been linked to such high fiscal costs,” says economist Jens Suedekum.
The FDP politician Gerhard Papke, longtime leader of the parliamentary group in North Rhine-Westphalia, warns his party against endangering the core of the brand. “We are currently organizing short-term social benefits in particular,” he says in an interview with the Tagesspiegel. In order to avoid even larger jumps at the pumps, the President of the German-Hungarian Society is instead against an oil embargo -Question embargoes against Russia, when you see that the Russians already shifted 25 percent of their oil exports to India in April.” There must at least be a debate “whether it is really possible to give Putin a hug – or whether we do not harm ourselves.”
Overall, the traffic light coalition of Chancellor Olaf Scholz (SPD) has already launched two relief packages with a total volume of 34 billion euros. But at the latest when the ancillary cost bills with the exorbitant increases in heating and electricity are in the mailboxes in the next few months, the pressure for further relief will increase.
But since Lindner insists on complying with the debt brake, larger leaps are hardly conceivable. In addition to the heating cost subsidy for low earners and a 300-euro energy flat rate (which will be paid out in the autumn via salary) for electricity costs, hope rests on the abolition of the surcharge for the promotion of renewable energies previously included in the electricity price, which will be financed through the budget in future.
But here too there is a risk of free-rider effects. From July 1, the surcharge will be abolished, which, including VAT, will amount to 4.4 cents per kilowatt hour. But in coalition circles it is feared that utilities will simply increase their working prices and collect part of the reduction themselves. For the rest of 2022, the abolition for a three-person household with an annual consumption of 4000 kilowatt hours actually means a gross relief of 88.60 euros, for a single household with an annual consumption of 1,500 kWh 33.23 euros, emphasizes the comparison portal Verivox.
“Electricity suppliers are legally obliged to pass this reduction directly on to households,” says Thorsten Storck, energy expert at Verivox. So far, however, only just under 50 of the more than 800 regional electricity suppliers have announced this price reduction on their websites. As with filling up, there is only one thing to do here: compare, compare, compare.
Thomas Engelke from the Federal Association of Consumers emphasizes that it cannot be legally prevented if the EEG levy abolition is not passed on in full. “He can only recommend consumers to pay attention to price increases around July 1st and to compare different providers. “And if a provider promptly compensates for this with other price increases, switch to other providers.”