Germany moves to beef up cartel laws amid fuel tax disappointment

Germany's anti-cartel authorities could be set to get greater powers, as the government seeks to respond to building criticism of a fuel tax cut that has not passed on the intended savings to the general public, reported dpa.

Economy Minister Robert Habeck told broadcaster Deutschlandfunk on Monday that he planned to introduce tougher laws to prevent anti-competitive actions by companies "as quickly as possible."

Oil companies were handed a tax reduction from the start of this month in Germany, with the idea being that they pass the saving on to consumers who are suffering from high inflation, partly as a result of the war in Ukraine.

Prices for petrol and diesel fell substantially to begin with, but they have since crept up again.

Drivers of diesel cars have most reason to be upset, with diesel fuel now just 1 cent cheaper per litre than it was on May 31, before the tax reduction came into force. Petrol drivers fare better, with current prices 20 cents lower than at the end of last month, according to the ADAC national driving association.

The snapback in petrol prices has left Finance Minister Christian Lindner, from the pro-business Free Democrats (FDP), having to defend the tax reduction, even in the face of criticism from Cabinet colleagues about its impact to date.

Habeck, who is from the Greens, said at the weekend that the oil majors were "raking in the profits."

On Monday he said that in response he would make "an antitrust law with claws and teeth." Taxing excess profits was one other option, he said.

Assigning blame as to who within the government alliance of Social Democrats, Greens and FDP is responsible for the disappointing impact of the fuel rebate would not help, he said.

Chancellor Olaf Scholz, who presides over the three-party coalition, said on Monday through his spokesperson that the tax reduction had worked to some extent.

The government would watch carefully for whether anyone was taking advantage of the situation, the spokesperson said.

According to Habeck's plans, the Cartel Office is to be given more powers to intervene, for example, to take tougher action against oil companies. Competition regulators should also be able to skim off profits if companies abuse their market power - even if they are not necessarily proven to be part of a price cartel.

"Politics is not as defenceless as one sometimes thinks," Habeck said.

Oil companies argue that the recent rise in prices reflects the prices they are themselves paying.

Senior FDP figure Christian Dürr echoed this argument on Monday, telling broadcaster ZDF that, without the tax reduction, prices at petrol stations would be even higher.

Dürr welcomed Habeck's move to make stricter cartel laws, cautioning however that taxing excess profits by companies was not the way forward as this would affect other companies also. He said he was "confident" a solution could be found within the coalition government.

An ADAC spokesperson said: "Of course we have had an increase in oil prices. But from the point of view of the ADAC, we see no reason why prices have risen so much."