High fuel prices: Economists criticize tank cuts

Status: 03/17/2022 1:29 PM

‘Totally obsolete’, ‘dumped money’: Economists sometimes criticize the Treasury discount advocated by Finance Minister Lindner. Economists have other suggestions for how to comfort citizens.

Prominent economists have criticized fuel subsidies planned by Federal Finance Minister Christian Lindner to excuse motorists from higher fuel prices. “Relief shouldn’t come with a watering can, but in a targeted way. That’s why I don’t think the tank discount is the right tool,” Clemens Fuest, president of the Munich Ifo Institute, told the Rheinische Post. .

Veronica Grimm, a member of the federal government’s Council of Economic Experts, also emphasized: “The debate about cuts to Treasurys is completely outdated. And we have to cut back on low and middle incomes. However, cuts on Treasurys ease more than the high earners, because they have More cars, longer distances.

Slight recovery in fuel prices

For the first time since the start of the war in Ukraine, fuel prices in Germany fell slightly. The price of diesel is down 4.2 cents per liter in one day, while the price of the Super E10 is down 3.3 cents. Yesterday, the average daily price of diesel nationwide was 2.25 euros per liter, ADAC announced. With the Super E10 the price was 2,159 euros. Compared to the level it was before the invasion of Russia, diesel is still about 59 cents a liter more expensive, and the E10 costs about 41 cents.

Today, too, there are signs of further decline, albeit slower, according to the Traffic Club. The average price of a liter of diesel on Tuesday was 2,292 euros. For a liter of Super E10, drivers had to pay an average of 2,192 euros nationwide.

Tank discount can make climate protection more difficult

“In high-income households, the proportion of spending on gasoline is particularly high, so the fall in gasoline prices tends to redistribute from the bottom up,” explained IFO President, Fuest. The federal government has already decided on targeted aid, such as assistance for long-distance travelers or subsidies for heating costs.

Grimm also criticized The Economy that cuts to tanks make fossil fuels cheaper. “This frustrates climate protection and exacerbates the challenges in the event of a potential disruption to Russian gas supplies. We need the disincentive effect of higher prices on demand so that we do not face greater challenges than we already face in the case of a fossil fuel shortage.”

Relief should be targeted, according to Grimm. “It would be conceivable that the recipient would have the energy money that they would have to declare as income. Then it would be largely repaid by those with higher incomes. Energy efficiency programs can help as well.” The Greens, among others, campaign for energy money.

crazy idea

Jens Sudkum, a member of the scientific advisory board at the Ministry of Economy and a professor at Heinrich Heine University in Düsseldorf, made a similar statement: Lindner’s proposal was “completely wrong” and “the money was thrown out the window.”

“The fuel price cap also eases the fuel bill of affluent SUV drivers,” Südekum says. The motto now should be energy saving. For that, people have to leave their cars wherever possible. High gasoline prices guarantee just that. “If you depend on a car, the state can help you selectively, whether that’s through a basic income tax allowance or, better yet, a fixed-rate energy allowance.

Environmental economist Felix Matisse of the Oko Institute called the reservoir deduction “one of the most ridiculous ideas of the past 20 years.” “The problem is not being solved by everyone who has a high fuel bill and gets a huge discount. This is not a target. It would be very expensive,” he told Spiegel newspaper. The tank discount is a “crazy idea” in terms of incentives, distribution and public budgets.

Lindner defends his proposal

The head of the FDP, Lindner, brought in temporary government support for the tanks at the weekend. He himself believes that the reservoir deduction is valid because it can be implemented more quickly than tax cuts. Funds can be saved from the budget. Reducing 10 cents per liter of diesel and gasoline will cost the state 550 million euros per month.

“If I had my way, it would have to be more than a dime and more than a month,” Lindner says. The bills will be run through gas station operators or mineral oil companies. The help will be temporary, but it will come quickly and without a lot of bureaucracy. Lindner emphasized that it was only a suggestion and not a government decision yet.

There have also been criticisms recently from the gas station association ZTG and consumer advocates. The suggestion was also met with lack of understanding among coalition partners SPD and Greens. Lindner was still optimistic: “At least I see many in the SPD support,” Lindner said in ARD– “Mechburger. Week” program. He is committed to that because such a move will help many travelers and other people.

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