GERMANS BEGIN FEELING FUEL PRICE RELIEF AS GOVERNMENT SUBSIDY TAKES EFFECT

German motorists began paying less at petrol stations on Thursday as a government fuel subsidy aimed at cushioning the impact of the energy crisis triggered by the war in the Middle East came into effect.

Petrol prices fell by about 14 cents on average to €2.06 per litre, equivalent to around $8.85 per US gallon, while diesel prices dropped by approximately 15 cents to €2.20 per litre, according to Germany’s automobile association ADAC.

Germany, Europe’s largest economy, has experienced a sharp rise in fuel prices amid disruptions to energy supplies from the Middle East linked to the ongoing US war against Iran.

However, some motorists said the reduction was insufficient to significantly ease the financial pressure.

“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.

“It helps in the short term, but in the long run I don’t think you can solve the problem with it,” she added.

Lorena Konle, a teacher, similarly described the prices as “unsatisfactory”, saying the reduction had made little difference to motorists.

Meanwhile, motoring organisations have raised concerns that oil companies may not pass the full value of the subsidy on to consumers.

The government subsidy is officially set at 17 cents per litre, although factors including global oil prices and exchange rates can influence the actual reduction at petrol stations.

Concerns over the implementation of the scheme were heightened by a previous fuel subsidy programme 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 during that programme.

“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 must not once again “get stuck with the oil industry”.

The measure has also attracted criticism from some economists, who argue that it is not sufficiently targeted at households most affected by high living costs, including low-income workers and pensioners.

“The fuel discount leads to redistribution in favour of frequent drivers with large cars,” Clemens Fuest, head of the Ifo Institute, told the Augsburger Allgemeine daily.

Germany is among several European Union countries that have introduced measures to cushion consumers from higher fuel costs. Other governments have opted for measures including fuel-tax reductions and direct financial payments to citizens.