Germany Row over Fuel Prices Escalates : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

23.04.01 01:29:28 Deutsche Ausgabe Energy

Row over Fuel Prices Escalates

HB/sms. As petrol prices in Germany soar, politicians and industrialists have been debating the role of the oil companies in pushing up prices and what action, if any, the government can take.

On Friday, the price of regular gasoline in Germany rose to a record DM2.15 a liter. Chancellor Gerhard Schröder told ARD radio that though market forces were in part behind the dramatic rises in pump prices, "the profit interest of the oil companies" was also a key factor.

On Sunday, the general secretary of Schröder's SPD, Franz Müntefering, stepped up the criticism of the oil companies. In an article for mass-market Sunday newspaper Bild am Sonntag, Müntefering raised the possibility that there was some kind of tacit agreement among the oil companies on the issue of price, though he stressed that there were no reasons to suspect any concerted, formal price-fixing arrangement on their part.

For the German watchdog, the Federal Cartels Office, spokesman Stefan Siebert told the Saarbrücker Zeitung that there was no reason to infer any price-fixing from parallel price movements.

And Economics Minister Werner Müller, who is independent of any party affiliations, told Handelsblatt that the possibility can be ruled out that the oil companies have been deliberately exploiting the market situation.

The increase in petrol prices is a Europe-wide phenomenon, Müller said. Germany is going through the same developments as every other European country, he added. "We will have to get used to the fact that we have no influence on petrol prices," he added, saying all consumers can do is adopt a more frugal attitude towards petrol and use public transport wherever possible.

But in Müntefering's view, it's unreasonable to expect people to switch to other forms of transport. "The car is the number one form of transport, and it must be made affordable for all," he argued in his Bild am Sonntag article, while also ruling out any form of government support for car drivers.

Germany's Transport Minister Kurt Bodewig (SPD) urged the car industry to produce more environmentally friendly models with low fuel consumption. He rejected any suggestion that the government's controversial program of "ecology taxes" on fuels – introduced in 1998 to prop up the country's pension system – was to blame for the high petrol prices.

Between now and 2003, the ecological tax on a liter of petrol will rise by DM0.06 per year and the VAT on a liter of petrol will rise by DM0.01 per year.

Germany's VDA car industry federation at the weekend urged the government not to raise ecological taxes any more. It also called on the oil companies not to hike petrol prices further.

In his ARD radio interview, Schröder insisted that the government can do little to ease the situation.

"What the oil industry always says – that the prices are to do with taxes – is wrong," Schröder said, adding that the government's scope for manoeuver is very limited.

But opposition politician Peter Ramsauer, a member of Bavaria's conservative CSU, said the government was hardly powerless in the face of rising petrol prices. He called for all ecological taxes to be scrapped.

"What the oil industry always says, that the prices are to do with taxes, is wrong," Schröder said. "Administrative political possibilities are very limited."

According to the oil companies, high demand from the United States has caused stocks to run down in the Dutch port of Rotterdam, and this has pushed up German prices. National stocks are too low, they argue, and German refineries are finding it impossible to meet increasingly exacting environmental standards.

-- Martin Thompson (, April 22, 2001

Moderation questions? read the FAQ