Germany restricts fuel price increases as Iran conflict causes surge

Germany's lower house of parliament approved initial measures on Thursday to reduce the surge in fuel prices in Europe's largest economy after the conflict with Iran has driven prices up sharply.

According to the law, petrol stations are only allowed to raise prices once daily at 1200 local (1100 GMT), but they can reduce them at any time. Breach of the law could result in fines up to 108,000 euros (?100,000.)

The bill tightens the antitrust laws in order to increase "transparency" in fuel prices. The ruling coalition between the conservatives of Friedrich Merz and the Social Democrats is already discussing further?steps.

Since late February, fuel prices in Germany have risen above 2 euros per litre. This is due to the U.S. and Israeli strikes against Iran and Iranian retaliatory attacks on Gulf states. The economists are now expecting inflation in Germany to be closer to 3% this year than the 2% they previously predicted.

The German cabinet approved the legislative package at mid-March. It is expected to come into effect by early April after it has been passed through parliament. After a year, the?measures will be reviewed. (Reporting and writing by Christian Kraemer; Editing by Madeline Chambers).

(source: Reuters)