Germany's coalition government is preparing for the possibility of additional relief measures to address surging fuel prices, Economy Minister Katherina Reiche told lawmakers following parliamentary approval of an initial set of policies.
Reiche, who sits in Chancellor Friedrich Merz's Christian Democratic Union (CDU), said she would consider raising an allowance aimed at supporting commuters and indicated her ministry would evaluate further measures to reduce power prices. She warned that the current package might not be sufficient if the US-led war on Iran continues to push energy costs higher.
The Bundestag approved a first package that includes a limit on price increases at the pump to be applied once per day and a change to antitrust rules that places the responsibility for justifying price increases on energy companies. Reiche made her remarks in the German parliament after that vote.
Negotiations within the coalition are ongoing. Members of the CDU-led bloc and the Social Democrats (SPD) are seeking to reach agreement by Friday on any additional steps to be taken. In parallel, the Finance Ministry, headed by SPD co-leader Lars Klingbeil, is weighing options for a windfall tax on oil companies designed to capture part of the extra profits resulting from elevated crude prices.
The minister framed potential further action as contingent on how the geopolitical situation evolves, noting that prolonged conflict linked to the US-led war on Iran could exacerbate pressure on energy markets and undermine the effectiveness of the current measures.
Context and next steps
- The coalition has put forward a staged response: an initial parliamentary package followed by talks on further relief measures.
- Key options under consideration include a higher commuter allowance and measures to reduce power prices.
- The Finance Ministry is assessing a possible windfall tax on oil companies to seize a portion of profit increases tied to rising crude prices.
Discussions within the coalition and decisions at the Finance Ministry will determine whether additional measures are adopted and how they would be structured.