Germany Targets Crackdown on Fuel Gouging After Tax Cut Fizzles

Iain Rogers
·2 min read

(Bloomberg) -- Germany plans to give competition authorities enhanced powers to crack down on fuel companies after emergency tax cuts failed to trigger the intended price reductions for consumers.

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Economy Minister Robert Habeck accused oil producers of failing to pass on the benefits of lower levies to consumers and reaping a profit from the surge in energy prices.

“My proposal is that we change our antitrust law and create one with teeth and claws” that promotes genuine competition, Habeck said Monday in an interview with Deutschlandfunk radio.

Antitrust law need to be reformed to make it easier to gather evidence of collusion between market participants, he said, adding that in such situations profits could be seized from suppliers.

“It’s not like you have people wearing sunglasses sitting in back rooms and coming to a deal,” he said. “Of course it doesn’t work like that.”

Chancellor Olaf Scholz’s three-party alliance agreed at the end of March to cut the levy on fuel for three months from June 1 by 30 euro cents per liter for gasoline and 14 cents for diesel, costing the government about 3 billion euros ($3.1 billion) in lost revenue.

The government’s plans to tighten competition rules were first reported on Sunday by Der Spiegel magazine.

Germany’s Federal Cartel Office already said in April it was launching a probe of the oil sector with “a clear focus on the refinery and wholesale level” to determine the reasons behind price developments.

Andreas Mundt, the office’s president, said last week officials are monitoring prices “very closely” and threatened stiff fines if evidence of collusion between suppliers is uncovered. A recent widening of the gap between the price of crude oil and fuel costs “at the very least raises questions,” Mundt said in an interview with public broadcaster ARD.

Finance Minister Christian Lindner said late Sunday he will try to make sure that consumers benefit in full from the temporary reduction in fuel tax and backed Habeck’s move to sharpen cartel law.

“What we cannot allow to happen is that suppliers in Germany reap the profits,” Lindner, who leads the pro-business Free Democrats, told ARD. “This is a task for the cartel office and it’s good that Robert Habeck has taken this on.”

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