Berlin moves to cap gasoline and diesel price increases

Germany has moved to impose new controls on gasoline and diesel prices as the country grapples with rising fuel costs linked to the ongoing Middle East crisis, Reuters reports.

On Thursday, March 26, the lower house of parliament approved initial measures aimed at curbing sharp price increases in Europe’s largest economy after the conflict in Iran triggered a surge in fuel costs.

According to Reuters, the legislation allows gas stations to raise fuel prices only once per day, specifically at 12:00 local time (11:00 GMT), while permitting price reductions at any time. Companies that violate the rules could face fines of up to €100,000 ($108,000).

The bill also introduces stricter antitrust provisions designed to improve transparency in fuel pricing. Additional measures are already under discussion within the ruling coalition, which includes conservatives led by Chancellor Friedrich Merz and the Social Democrats.

Fuel prices in Germany have generally exceeded €2 per litre since late February, driven by US and Israeli strikes on Iran and Tehran’s retaliatory actions against countries in the Persian Gulf.

Reflecting these pressures, economists now expect Germany’s inflation rate to reach around 3% this year, compared with earlier projections of 2%.

The German cabinet approved the legislative package in mid-March. The measures are expected to take effect in early April, following full parliamentary approval and will be subject to review after one year.

By Tamilla Hasanova