Reported from the source

Quick summary: Sven Schulze, Minister-President of Saxony-Anhalt, is advocating for a reduction in energy tax on fuels to combat soaring prices, which he attributes to the Iran conflict. His call comes as fuel prices exceed two euros per liter following an alleged attack by the USA and Israel on Iran, and ahead of state elections where his coalition fears losses to the AfD. While Schulze argues for immediate implementation and social justice, economists warn against state intervention, and the federal government has already announced measures like regulating price increases and releasing oil reserves.

Sven Schulze, the Minister-President of Saxony-Anhalt, has called for a ‘fuel tax brake’ to counteract the significant increase in fuel prices, which he states have surged due to the Iran conflict. Speaking to ‘Bild am Sonntag,’ Schulze (CDU) demanded a reduction in the energy tax on fuels, arguing that the federal treasury should not profit from the oil price crisis, as tax revenues increase with rising crude oil prices. He insists that fuel prices must return to pre-explosion levels. Schulze urged Federal Finance Minister Lars Klingbeil (SPD) to implement an energy tax reduction immediately until the market normalizes. He described the measure as socially just, emphasizing that while international crude oil prices cannot be influenced, national taxes can be reduced. This demand is made in the context of upcoming state elections on September 6th, where Schulze aims to defend his position. His coalition partners (CDU, SPD, FDP) are concerned about potential vote losses, especially given that the AfD has recently polled at 39 to 40 percent, raising the possibility of them achieving an absolute parliamentary majority for the first time. However, not all agree with state intervention. Economist Samina Sultan noted that budget funds are tight, suggesting only measures with a sustainable effect on fuel prices should be taken. Ifo-President Clemens Fuest warned against state interventions to lower oil and gas prices, stating that eliminating price signals through discounts or tax cuts is economically harmful. Fuest argued that tax cuts do not reduce the overall economic costs of oil and gas, as they would need to be offset by other taxes or reduced government services. He stressed the importance of self-responsibility in the economy. The federal government has already announced measures to regulate price increases at petrol stations, allowing price hikes only once a day while permitting price reductions at any time. Germany is also participating in the release of a record amount of oil from the International Energy Agency’s strategic reserves. Finance Minister Klingbeil has also called for stricter cartel law, suspecting that the mineral oil industry is exploiting the crisis. Since the alleged attack by the USA and Israel on Iran at the end of February, fuel prices significantly above two euros per liter have become common in Germany, leading many to refuel in cheaper neighboring countries like Poland. A fuel discount was previously introduced in Germany in 2022 by the ‘Ampel’ government during the energy crisis, lowering the energy tax on fuels to the European minimum for three months. Scientific studies suggested this measure did lead to lower prices at the pumps, though critics cited high costs for taxpayers and an artificial boost in fuel demand.

Source: www.zdfheute.de