Why is petrol more expensive in Germany than most places in the EU?
Why is petrol more expensive in Germany than most places in the EU?
The ongoing conflict in Iran has driven fuel costs up throughout Europe, but Germany has experienced the most significant surge — petrol prices have climbed nearly 5% in recent weeks, surpassing the EU average. Compared to nearby nations, the disparity is noticeable. France and Austria saw modest increases of about 2%, Estonia recorded a 3.6% rise, and Luxembourg a 3.5% jump, while Slovakia and Hungary reported minimal hikes of just 0.1%.
The European Commission, through its weekly Oil Bulletin, has highlighted that Germany, the Netherlands, Denmark, and Finland have seen the steepest price jumps. Currently, Dutch drivers face the highest petrol costs in Europe, averaging €2.17 per litre. Germany trails closely at €2.08, with Finland also in the higher range, notable for its elevated diesel prices.
Experts point to national tax and duty frameworks as the primary cause. Germany imposes higher energy taxes on fossil fuels, driven by environmental goals and infrastructure funding, and adds a CO2 levy. This means price hikes in Germany are automatically more pronounced. In contrast, many European nations have lower VAT, oil, and CO2 rates, reducing the overall burden on consumers.
Price caps and regulatory measures
Croatia and Hungary have already introduced price caps to curb costs. In Croatia, fuel prices surged by four cents per litre initially but will now be frozen at €1.50 from 23 March. Hungary has set a cap of €1.51 for petrol and €1.59 for diesel, though this applies only to residents, leaving tourists with foreign license plates to pay more.
Austria follows a different approach: petrol stations can only increase prices once daily, at noon. Reductions are permitted at any time, creating a clearer, more transparent system. However, whether this model results in lower prices remains open to debate.
Economics Minister Katherina Reiche has criticized the rapid rise in fuel costs linked to high raw material prices and slow declines afterward. She advocates for a “breakthrough” in this pricing mechanism by proposing daily price increases be limited to one instance per station.
Industry pushback and competition concerns
A task force convened under Sepp Müller’s leadership accused oil companies of “price gouging,” calling for stricter oversight. A recent Handelsblatt study revealed that firms often exploit crises to accelerate price hikes, with Berlin professor Ferdinand Fichtner arguing that the current surge cannot be attributed solely to oil price increases. “Really high profits are being made here,” Fichtner remarked.
The task force includes representatives from BP and Shell, the Federal Cartel Office, industry associations, consumer groups, and the ADAC. Meanwhile, the petroleum sector has contested these claims. Christian Küchen of the Fuels and Energy trade association told Tagesschau that profit margins have remained stable since the start of the conflict, urging caution against tightening antitrust laws.
Industry bodies, including the Bundesverband Freier Tankstellen and the Zentralverband des Tankstellengewerbes, warn against political interference in pricing models like Austria’s. Their joint statement emphasized that over half of fuel costs are taxes and duties, suggesting government intervention should focus on these components rather than disrupting market competition.
