Federal Minister for Economic Affairs, Katherina Reiche, maintains that the tank discount remains “policy-wise questionable.” She stated in an ARD interview that the incentive structure created by the measure is flawed and could potentially increase fuel consumption. Reiche explained that when the state interferes with prices, the critical price signal is diminished, which she argues ultimately exacerbates a crisis.
In place of the fuel discount, Reiche advocates for a more targeted approach, specifically the direct payment mechanism that can be administered through the Federal Tax Office. She considers this a fairer method, asserting that low-income earners who have little taxable income can fully benefit from this money. Furthermore, anyone who does not require the assistance must repay the amount if they claim it. However, the Minister criticized the current lack of implementation of this direct payment mechanism, urging the SPD-led Federal Ministry of Finance not to evade responsibility. She stated it is unacceptable that the mechanism cannot be processed due to claims of lack of time or excessive complexity, demanding that the relevant authority finally activate the system.
In addition to focused direct payments, Reiche supports reducing the value-added tax (VAT) on both diesel and gasoline. Currently, an EU directive prevents either a VAT exemption or a reduced tax rate for fuels. The CDU politician insists that efforts should be made to initiate a change at the European level, believing that securing a consensus across Europe is possible because high fuel prices affect the entire continent, not just Germany. This is, in her view, an issue that should be discussed within the EU Finance Ministers’ Council.
Following her visit to Saudi Arabia, the Minister expressed concern about the economic implications of the energy crisis. She reported that crude oil transport has, in fact, returned to pre-war levels. Despite the de facto closure of the Strait of Hormuz, the Gulf states managed to allow oil tankers to pass with the help of US escort ships. However, Reiche stressed that the core problem lies with refined oil products-diesel, kerosene, and gasoline, as well as chemical precursors. These products remain severely scarce, with production and transport operating at less than 20% of pre-war levels, leading to critical shortages.
These bottlenecks have an immediate effect on prices within Germany while simultaneously jeopardizing the economic recovery. Reiche noted that the current uptick-which is estimated at 1.3 or perhaps 1.4 percent-currently contains an element of uncertainty. She expressed apprehension as to what the inflation caused by higher energy prices will ultimately be.
Even after the coalition agreed to introduce a fuel price cap, she remains skeptical. Reiche noted that such a cap would immediately impact the refining industry, raising questions about how heavily refineries could be burdened without compromising supply security. She emphasized that this must first be discussed with the industry, then with the federal states where the refineries are located, and finally, measures must be taken to prevent Germany from exporting gasoline while simultaneously facing higher prices and scarcity. To gauge feasibility, she has invited the entire industry, labor unions, and the federal states toward the end of October to evaluate the pros and cons and explore a viable corridor.
Regarding the passing of Bärbel Bas, who resigned as Federal Minister of Labor and SPD co-leader, Reiche offered sincere condolences. She stated that the loss of a loved one, particularly a stepdaughter, was an almost unimaginable occurrence even for her as a mother. Nevertheless, she cautioned that planned reforms must move forward despite personal setbacks. She emphasized that no house or government entity can be exempted; everyone must contribute to realize the coalition agreement. Reiche expressed great anticipation, not just optimism, regarding her collaboration with the new Minister of Labor, Alexander Schweizer (SPD), whom she described as a highly experienced colleague.
Finally, the Minister identified a significant need for adjustment in working hours. Stating that the eight-hour workday dates back to 1918, Reiche argued that in addition to making weekly working time more flexible, fundamental increases to working hours should be made possible in the future. Discussions are already underway between collective bargaining partners to raise overall working time at the factory level, thereby improving overall efficiency. She believes that greater working hours are necessary for real gains. For example, she heard from the automotive industry that merely implementing a 40-hour week per facility could lead to a 20 percent increase in efficiency.
