Germany has introduced a new fuel subsidy aimed at easing the impact of rising energy prices linked to the ongoing conflict in the Middle East.
The subsidy came into effect on Thursday, with motorists beginning to see lower prices at petrol stations across the country.
According to the automobile association ADAC, the average price of petrol fell by about 14 cents to €2.06 per litre, while diesel dropped by around 15 cents to €2.20 per litre.
Germany, Europe’s largest economy, has experienced a sharp increase in fuel prices amid disruptions to energy supplies from the Middle East.
However, some motorists said the reduction was insufficient to significantly ease the pressure on consumers.
“It’s just a drop in the ocean,” Andrea Hoecker, a 33 year old public relations worker, told AFP at a petrol station in Frankfurt.
She said the measure could provide some short term relief but questioned whether it would address the problem in the long term.
Another motorist, Lorena Konle, a teacher, also described the current prices as unsatisfactory.
“I have to be completely honest: with the prices we have, it doesn’t really make a difference,” she said.
Motoring organisations have also raised concerns over whether the full value of the subsidy would be passed on to consumers.
The government has officially set the subsidy at 17 cents per litre, although the actual reduction motorists receive at the pump can vary depending on factors including oil prices and exchange rates.
Concerns were also raised over the handling of a previous fuel subsidy programme introduced in May and June.
According to Germany’s monopolies commission, energy companies retained about €200 million of the €1.6 billion paid out by the government under the earlier scheme.
“This new fuel discount must now finally reach consumers in full,” a spokeswoman for the Auto Club Europa told AFP.
She warned that part of the subsidy should not once again “get stuck with the oil industry.”
Some economists have also criticised the measure, arguing that it may not sufficiently target lower-income workers and pensioners who are most affected by rising living costs.
Clemens Fuest, head of the Ifo Institute, said the fuel discount could instead benefit frequent motorists with larger vehicles.
Other European Union countries have introduced different measures to cushion households from rising fuel costs, including reductions in fuel taxes and direct payments to citizens.
The German government’s latest intervention is intended to provide temporary relief to motorists as energy prices remain affected by disruptions linked to the Middle East conflict.
AFP
