Germany Eyes New Cartel law, As Fuel Tax Cut Falls Short

Germany's vice chancellor is proposing new powers for the country's antitrust agency to clamp down on oil companies amid disappointment over the limited effect of a cut in fuel taxes. A three-month cut took effect on June 1 as part of a wider package of measures aimed at blunting the financial fallout from Russia's invasion of Ukraine, which also includes cheap tickets for local public transport.

But there have been widespread complaints that prices at the pump have crept back up substantially after initially falling. Industry representatives insist that the tax reduction is being passed on to consumers but that they face pressure from rising prices. Many politicians, facing charges that the plan is an expensive flop, accuse oil companies of using the tax cut to line their pockets.

Leading politicians in Chancellor Olaf Scholz's center-left Social Democrats and the Greens have called for a tax on what they call "excessive profits" earned by oil companies since the war pushed up prices. But the third partner in the coalition government, the pro-business Free Democrats of Finance Minister Christian Lindner, have vehemently rejected that idea.

Vice Chancellor Robert Habeck, who is also the economy minister and responsible for energy, responded with a proposal to beef up the powers of the Federal Cartel Office. "Taxing excessive profits doesn't seem to be capable of winning a majority in the coalition," he told Deutschlandfunk radio on Monday. "My proposal now is that we change cartel law, we draw up a cartel law with claws and teeth." The idea is to give the antitrust authority powers to look into companies' books and lower the threshold for possible punishment. Habeck also proposes enabling the "unbundling," essentially a break-up, of companies. Setting out the plan on Sunday, Habeck acknowledged that the plan won't help in the current situation but said it would help in the future.

(PTI)