© Adobe Stock / Sandor Jackal

Federal Government adopts Fuel Price Package

On 17 March, the Federal Cabinet adopted a package of measures to strengthen competition on the fuel market and to improve the predictability of price information for consumers in an environment of higher fuel prices.

Checking fuel prices at the pump has become a worrying affair for both consumers and companies, with prices now often above €2 per litre. In light of military escalation in the Middle East and the uncertainty ¬– or impossibility – for oil tankers to navigate the 30- to 50-kilometre-wide Strait of Hormuz between Iran and the United Arab Emirates (UAE), oil prices on the global market have surged by around 50%, driving up fuel prices across European as a result. In Germany, fuel prices have increased faster than the European average.

To make fuel prices more transparent and to limit the number of times petrol stations can put up prices each day, the Federal Government adopted a package of measures this March. It will also strengthen the powers of the Bundeskartellamt as an additional step. “We are making it easier for the Bundeskartellamt to clamp down on abusive price increases, thus responding to rising fuel prices in a way that heeds the principles of the market economy, without government-set retail prices and without further increasing the burden on consumers,” Federal Minister Katherina Reiche said.

Limiting price increases and monitoring high prices more effectively

The package has three pillars: limiting petrol stations to a single price increase per day, more effective control of abusive pricing, and faster, more effective follow-up of sectoral investigations.

The new Act seeks to restrict the number of price increases at petrol stations, thus making prices more predictable for consumers and companies. It mirrors a successful approach from Austria, allowing stations to raise prices only once a day, whilst price reductions may be made at any time. The effectiveness and impact of the measures will be reviewed after six months.

In addition, competition rules designed to prevent the abuse of market dominance will be tightened, making it easier for the Bundeskartellamt to clamp down on fuel companies with a dominant or powerful market position where there are signs of inappropriately high prices.

Enhanced structures for greater competition in the fuel sector

The third pillar of the package creates the legal basis for accelerating improvements to competition structures in the fuel sector. Procedures already available to the Bundeskartellamt today to follow up sectoral investigations will be streamlined, enabling quicker detection and remediation of structural weaknesses in competition. Remedial actions can also be launched more swiftly.

Following the Cabinet’s adoption of the Fuel Price Package, the proposal has now been forwarded to Parliament. If the other parliamentary groups agree, a shortened and maximally accelerated parliamentary procedure will be used, meaning that the package could take effect in early April.