Germany’s coalition partners are at odds over how to tackle record-breaking fuel prices, with the centre-left Social Democrats (SPD) on Tuesday accusing conservative Economy Minister Katherina Reiche of inaction as a leading institute warned against renewing blanket tax cuts on petrol.
“We’ve had enough,” the SPD’s general secretary, Tim Klüssendorf, told news portal t-online in a broadside against Reiche, who is from Chancellor Friedrich Merz’s Christian Democrats (CDU).
“Millions of people in our country are still dealing with completely excessive fuel prices, and the responsible minister Katherina Reiche is watching by while oil giants make record profits at the expense of the public,” Klüssendorf said. “We urgently need measures against extortionate fuel prices.”
Germany has not been spared from the worldwide spike in energy prices linked to the war in Iran and the blockade of the Strait of Hormuz.
Petrol reached a new peak of €2.273 ($2.62) per litre on Sunday, according to average national figures from the ADAC automobile club, while diesel is approaching the record highs set in April shortly after the conflict erupted.
Earlier this year, Merz’s government introduced a two-month fuel tax cut to relieve motorists, but the Kiel Institute for the World Economy (IfW) on Tuesday cautioned against reviving the measure.
Ministers should be “very cautious” about interfering with fuel prices, IFW economist Klaus-Jürgen Gern told Deutschlandfunk radio. The government should keep a close eye on which groups are struggling to pay electricity and heating bills, and seek to “soften hardships.”