Podcast “Learned something again”: How politicians want to reduce energy costs

Fuel discounts, subsidies for heating or groceries, lower VAT – the parties make very different proposals on how they want to help people cope with rising prices. Which are under discussion, which have already been decided and which have already been rejected.

Everything gets more expensive. Potatoes cost 66 percent more than a year ago, milk prices have risen by a quarter – probably just the beginning for groceries, because Aldi is only now beginning to raise its prices across the board. Around 400 items are to become more expensive.

Energy products have also become significantly more expensive in recent months. Gasoline, diesel, heating oil and others cost in February 22.5 percent more than a year ago. And that was before Russia invaded Ukraine. “The current price increases, especially for petroleum products, are not yet reflected in the results,” he said Federal Statistical Office commented on the inflation rate of 5.1 percent for February. The war is only now beginning to superimpose the corona effects. And clearly noticeable.

The comparison portal Verivox has calculated that energy costs have increased by almost a third since then. According to this, a model household paid 5454 euros per year for electricity and heating on February 24th. On March 17, just three weeks later, it was 6946 euros.

Relief package is taking shape

But politicians want to help and relieve people. At the beginning of March, Robert Habeck’s Ministry of Economic Affairs bought a gas reserve for 1.5 billion euros in order to guarantee security of supply in Germany. A little later, the Vice Chancellor announced a relief package: “Extremely high heating costs, extremely high electricity prices, extremely high fuel prices” are overwhelming for many people, said Habeck – without specifying what he is planning.

That seems a bit clearer now. The “Bild” newspaper reported last week that the SPD, Greens and FDP want to pay part of the spending on the CO2 tax back to citizens. In addition, low earners should also be supported with heating costs. The Bundestag had already decided on this aid before the war in Ukraine and even doubled it last week, but so far only two million recipients of housing benefit, students and trainees have benefited from it. In the next few months, low-income earners are also to receive a one-time cash injection in the low three-digit range.

In addition, drivers should be relieved. For every liter of petrol or diesel they fill up, they should receive a discount of between 20 and 40 cents when paying. In an interview with ntv, FDP parliamentary group leader Christian Dürr, among others, described the proposal of his party leader, Federal Finance Minister Christian Lindner, as “unbureaucratic emergency aid”. And yet there is resistance.

Broad opposition to tank discount

Not only environmentalists, but also economists do not believe in the idea, both for the same reason: those who drive a lot or use a lot of fuel benefit most from a tank discount. In her eyes, this applies more to high earners who drive high-horsepower cars or SUVs and are therefore not necessarily dependent on state aid.

Also energy scientists Bruno Burger shares this view. The researcher from the Fraunhofer Institute for Solar Energy Systems (ISE) explained in the ntv podcast “Climate Laboratory” that people with low incomes could be given more targeted help. You don’t have to add 30 or 40 cents to every liter of petrol, “so that someone who drives a fat SUV that consumes ten or more liters of fuel also benefits,” he criticizes. “There are simply too many people who drive cars that are too big and use too much fuel. Anyone who buys such cars must also be willing to pay for them. They cannot expect the state to support the high fuel consumption.”

A fuel subsidy helps many people who live in the countryside and depend on the car to get to work, that’s clear. And, of course, also haulage companies that need expensive diesel for their trucks. It is also clear that many shelves remain empty when the trucks stop. The tank discount, however, rewards lead feet: the more they consume, the more state aid they receive.

Are politicians serious?

But the idea has a second catch. If a liter of diesel costs 2.30 euros, the price for drivers drops to 2.10 euros with a 20 cent discount. “But what if the price rises again to 2.30 euros?” asked ntv stock market reporter Frank Meyer rhetorically. “What did you win then?”

Nothing. That is why the Union has brought up a temporary reduction in VAT on petrol and diesel as an alternative. There, the relief increases and decreases with the price. Finance Minister Lindner has already rejected this proposal. Just like a temporary speed limit on motorways – although the German Environmental Aid (DUH) had calculated that one Save 3.7 billion liters of oil could if everyone drives a little slower.

Bruno Burger has no understanding for this quick cancellation, because in his eyes a speed limit is the most effective immediate measure. “The fuel consumption drops drastically if you drive on the Autobahn 130 instead of 150 or 180 kilometers per hour,” says the energy scientist in ntv’s “climate laboratory”. His sobering conclusion: “As long as we don’t have a speed limit on the freeways, politicians aren’t really serious about reducing energy consumption.”

Does Lindner listen to Özdemir?

Cem Özdemir probably sees it very similarly. As is well known, the Federal Minister of Agriculture prefers to drive a bicycle rather than a limousine, so he doesn’t seem to be a big car fan or a fan of the tank discount. Instead, he suggests relieving people in the supermarket.

Not everyone owns a car or is dependent on it, but everyone has to feed themselves, Özdemir said in “Spiegel”. One has to ask whether a relief for food is not more targeted than for the price of petrol. “We can’t go across the country with the cornucopia.”

It is an appeal that Finance Minister Lindner certainly shares. The head of the FDP is also very careful to run the German budget with as little debt as possible. In view of these reservations, will he move away from his tank discount again? Not clear. The only thing that is certain is that Lindner and all other Ampel members are serious when they say they want to relieve people: Also last week, the federal government approved the 2022 Tax Relief Act. The commuter lump sum for long-distance commuters, the basic allowance and the employee lump sum in the tax return increase retrospectively at the turn of the year.