Germany Limits Fuel Price Hikes to Once Daily to Curb Rising Costs

Germany has taken steps to combat rising fuel prices triggered by the ongoing conflict in Iran. On March 26, the German Bundestag approved a package of measures, including a rule that limits fuel price hikes to once a day, at noon. Previously, prices at petrol stations could change up to 50 times a day. The new regulation also empowers the Federal Cartel Office with greater authority to enforce market competition.

The measures aim to make fuel pricing more predictable and transparent, following Austria's model. Violations could result in fines of up to €100,000. The package still requires approval from the Bundesrat, the upper house of parliament, which is expected to vote on Friday. The law will be reviewed after a year in force.

Fuel prices in Germany have surged due to the war in Iran, which began with US-Israeli attacks in late February. Iran retaliated with strikes on Israel, US military bases, and targets in neighboring Arab states, leading to over 1,400 reported deaths. In response, Germany plans to release some of its oil reserves, aligning with a call from the International Energy Agency.

Economists and officials remain cautious about the measure's long-term impact. Economist Justus Haucap noted that while the rule may help consumers compare prices, its success in lowering them sustainably is uncertain. Chancellor Friedrich Merz has hinted at additional measures, including a temporary energy tax cut and a price cap on petrol and diesel.