Claudia Kemfert, an energy economist at the German Institute for Economic Research (DIW), has publicly criticized the fuel price cap law (KHPG) proposed by Federal Minister for Economic Affairs Katherina Reiche (CDU). Kemfert told the Funke media group that the planned price ceiling offers only a limited relief, describing it as having “a handbrake applied.” Although it promises protection against high prices, she doubts it will be effective in practice. The current drafting allows the federal government to intervene only if gas prices in Germany increase significantly for three consecutive weeks compared to the EU average. According to Kemfert, this makes the relief for drivers merely conditional: if prices rise everywhere in Europe, nothing happens, even if refueling becomes unaffordable for many people.
Instead, the scientist urged politicians to focus on making Germany generally less reliant on fossil imports. “Whoever wants long-term protection from price shocks must reduce the dependence on oil, instead of just tinkering with gas station prices,” she stated. Furthermore, she called for targeted aid for especially affected individuals, a levy on crisis-induced “excess profits,” and a consistent expansion of affordable mobility alternatives.
The CDU Economic Council signaled support for Reiche’s draft proposal. Wolfgang Steiger, the council’s General Secretary, told the Funke newspapers that it is correct that Minister Reiche centered the consideration for a fuel price cap on ensuring supply security. He noted that state price ceilings are fundamentally a problematic interference with market mechanisms.
Steiger also pointed out that the numerous restrictions and exceptions included in the legislative draft demonstrate just how difficult such an intervention is in reality. He viewed the inclusion of these limitations positively, arguing that the price cap should not apply automatically and must account for actual market developments. Steiger emphasized that “it must be absolutely certain that the supply of gasoline and diesel can be guaranteed at all times.”
The agreement for a fuel price cap, modeled after systems in Belgium and Luxembourg, had been reached between the federal government and the states several weeks earlier. This decision stemmed from a significant rise in domestic fuel prices, which had increased sharply following the Iran war and the closure of the Strait of Hormuz.
