German petrol stations only allowed one price increase per day to try and curb the Iran war surge

German lawmakers approved initial measures on Thursday to 'curb fuel costs that have risen in the wake of the Iran War. One measure was to limit petrol station price increases to one per day.

Petrol stations can only increase their prices in the midday hours (1100 GMT) starting early April. They will still be able make any reductions they want at any time. The legislation passed by lower house of parliament could punish violations with fines up to 100,000 euros ($108,000). The bill is backed by both the Greens and the Social Democrats as well as the conservatives who are in power. It also tightens the antitrust laws to improve transparency of fuel pricing.

Since the start of the conflict, diesel prices in many places have increased to more than 2 euros per litre. They were previously around 1.75 euro. Economists predict inflation will be closer to 3% than the 2% originally predicted.

MORE MEASURES TO COME

German Economy Minister Katherina Riehe said that she would also be open to an additional temporary increase in commuter allowances, which is a tax deduction given for the travel between a worker's home and their primary place of employment.

Additional measures that could be considered include the reduction of road tolls for trucks and the VAT rate on petrol stations.

Social Democrats also propose a windfall profits tax on energy companies as well as price caps at gas stations.

More than 90% of 450 respondents to a DMB survey, which represents Germany’s small and medium-sized businesses, complained about the increase in fuel and energy costs since the beginning of the Iran War.

More than half of the respondents said that the price increases were a major burden on their ongoing operations.

Dirk Engelhardt, of the German Association for Road Haulage, Logistics and Disposal, stated on Thursday that diesel costs increased by 28% in march.

Diesel costs 30% of the total cost. He said that the member companies would need to raise their freight rates between 8% and 10%.

He said that for some providers this was a serious threat to their existence. Engelhardt said that margins are extremely low. (Reporting and writing by Christian Kraemer; Editing by Madeleine Chambers, Andrew heavens, and Andrew heavens).

(source: Reuters)