Germany mulls new cartel law as fuel tax cut fails | Economic news

BERLIN (AP) — Germany’s vice chancellor is proposing new powers for the country’s antitrust agency to crack down on oil companies amid disappointment over the limited effect of a cut in fuel taxes.

A three-month reduction came into effect on June 1 as part of a wider package of measures aimed at mitigating the financial fallout from the Russian invasion of Ukraine, which also includes cheap tickets for public transport local. But there have been numerous complaints that prices at the pump have risen significantly after initially falling.

Industry representatives insist that the tax cut is passed on to consumers, but they are under pressure from rising prices. Many politicians, accusing the plan of being a costly flop, accuse the oil companies of using the tax cut to line their pockets.

Political leaders from Chancellor Olaf Scholz’s centre-left Social Democrats and the Greens have called for a tax on what they call “excess profits” made by oil companies since the war drove up prices. But the coalition government’s third partner, Finance Minister Christian Lindner’s pro-business Free Democrats, have vehemently rejected the idea.

Vice-Chancellor Robert Habeck, who is also economics minister and responsible for energy, responded with a proposal to strengthen the powers of the Federal Cartel Office.

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“Taxing excessive profits does not seem to be able to win a majority in the coalition,” he told Deutschlandfunk radio on Monday. “My proposal now is that we change the cartel law, we make a cartel law with claws and teeth.

The idea is to give the antitrust authority the power to examine companies’ books and lower the threshold for a possible sanction. Habeck also proposes to allow “unbundling”, essentially a break-up, of companies.

Presenting the plan on Sunday, Habeck acknowledged the plan would not help in the current situation, but said it would help in the future.

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