The way this goes.....billions of Euro have been poured into a 90-day campaign to dump the gas-tax (32-cents roughly per liter), and most of the 'savings' (if you can call it that).....have been passed by increased pricing. This morning....if you check local gas stations....the liter price for E-10 is 1.97 Euro.
If you go to the end of May (as the full tax was in place), the liter price was around 2.20....with the early-May price being close to 2.12.
Hint: a fair number of Germans expected as the tax relief came....prices would have dropped to the 1.75-to-1.80 level. In simple terms....fuel today is about seventeen cents above what people/the government expected.
Over the weekend, the Energy Minster openly discussed the idea of breaking up the gas companies (saying they are a cartel) and denying them profits with a potential new excess profits tax.
The term 'illegal profits' gets used a good bit.
Everyone in the government coalition reading off the same script? No. The FDP, whose boss is the Finance Minister....said in a blunt way that the excess profit tax idea is crappy, and proven unworkable in various countries (UK and Italy for example).
Some people have also said....if you implement this....law suits will start that it's very picky going after only one sector for excess profits, and the court would likely throw this out. Yes, in simple terms....all companies would have to be evaluated for excess profits, and then you open up a huge can of worms.
On the idea of breaking up the gas companies? The general idea is smaller companies 'compete'.
So, if you were a gasoline company and looking at the questionable future with E-cars and massive downturns expected between 2030 and 2040 on fuel purchases....how eager would you be to upgrade or perform regular improvements in the system? It's like the nuclear energy companies....when they saw the daylight and were going to be denied existence....there was only one path to 'walk'. Today? As eager as the government might be to keep a couple of the nuke plants around....the remaining system has been built to shutdown by the end of 2022.
I would suggest by various regulation efforts....the Germans have tinkered with the fuel companies enough....to make the basic cost of getting fuel to your tank.....fairly expensive.....then layering various taxes over fuel, and thinking there was a limit to escalation of prices.
If the government was successful in breaking up the gas companies....my general expectation is that the government would wake up in twelve months to realize they'd made a bigger mess of the fuel escalation, and that diesel was now around 2.70 Euro a liter, and E-10 was around 2.60 Euro a liter. Yeah, very crappy prices, indeed.
And while all of this is going on.....you just have to wonder about electricity prices in Germany, as the E-car generation progresses along.
How quick will this dismantle gas companies idea occur? I'd say the political folks leave in two weeks for their summer vacation. Once they return (mid-August)....the idea will either be tossed, or implemented....probably in a matter of 90 days. Lawsuits will occur, and court action might happen by December.
Ought to be exciting times for the inflation business.
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