Locally, for me, E-10 gas is sitting at 2.33 Euro per liter this AM. Saudi hype....some shipments are not going to occur over the next month.....is worrying folks, and suggesting prices might get to 2.50....maybe even 2.70.
So....the Merz coalition is discussing eight ideas. Listed? (I read these off a Focus business article....which I consider reliable):
VAT reduction : Lowers the gross price, but triggers high tax losses.
Reduction of energy tax: Relief is provided by a fixed amount per liter. EU problem...there are minimum tax rates mandated.
Fuel discounts: They can take effect quickly, cost the state billions, and primarily benefit frequent drivers. Four months ago....this was a temp-fix.
Fuel price cap: Limits the price immediately, but can cause market distortions and additional government costs.
Excess profit tax: Merz has already rejected this option. It could have skimmed off extraordinary profits from oil companies, but would not have directly lowered fuel prices.
Lowering the CO2 price would make fuels cheaper, but would weaken the incentive to protect the climate.
Direct aid: This could provide targeted relief to particularly affected households, but would need to be organized and financed.
Mobility allowance: Could support low-income commuters with their travel costs, but does not lower the price of fuel at the pump.
My guess? In approximately ten days....a fix will be created....with two of these suggested ideas (of the eight)....going halfway on each. Time limit? Probably fixed to end in early-to-mid January 2027.
This being easily fixed if the war in Ukraine ended, and gas-trading were to settle back with the Russians? Well....that comes up as a discussion topic daily.
How fast will the fuel escalation occur? I'm one to believe that E-10 could already be near 2.60 by the end of next week.
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