The Economics Minister wants to use antitrust law to take action against corporations that do not pass on the tax rebate at the gas station to drivers. But many have failed with this plan. There is another idea that might succeed.
The Green Economics Minister Robert Habeck does not want to accept that mineral oil companies are now changing the prices at the petrol pump several times a day, apparently in a well-coordinated manner, while pocketing the fuel discount that the federal government actually wanted to give to motorists. With the help of antitrust law, Habeck wants to put an end to this activity.
And that’s a tradition. Because one of his predecessors as Economics Minister, the long-forgotten ex-FDP leader Philipp Rösler, had exactly that on his agenda eleven years ago: he wanted to tighten antitrust law to get competition at the gas station going. That was something like the premiere.
When one of the successors in office, the less forgotten Sigmar Gabriel, incidentally SPD chairman, in 2016 the hustle and bustle at the gas station became too colorful, he also thought aloud about state intervention. Gabriel’s thought process had no consequences. And now Habeck.
One thing is clear: Economics ministers from all parties have already played Robin Hood, wanting to take it from the rich and give it to the poor at the gas station, but they’ve lost their teeth in the process. Habeck’s plan now looks like this: The Cartel Office should be given more opportunities to intervene in order to be able to take tougher action against mineral oil companies. In the future, one wants to assume that companies are abusing their market power and that there is a cartel if several groups are constantly offering coordinated prices at the same time.
As a last resort, demergers should also be possible in the case of dominant positions. In a further step, the Federal Cartel Office should be able to skim off the profits. As the reason for his plan, Habeck says in the “Spiegel” what everyone thinks: “The mineral oil companies are reaping the profits, the consumers don’t notice the tax cut” on petrol and diesel fuel, which the federal government is planning with a view to the decided and implemented high prices.
Habeck is not only driven by angry motorists, but also by a belligerent opposition. The deputy leader of the Union faction, Jens Spahn (CDU), criticized: “The tank discount, worth billions, seeps away and the traffic light is watching. Ordering the oil multinationals to report is the least that Economics Minister Habeck can do.” Apparently he now wants to go further. But can that succeed?
In earlier investigations, the Cartel Office came to the conclusion that an oligopoly dominates the petrol station market in Germany. Only five companies, led by Aral and Shell, control around 70 percent of fuel sales. It is easy for oligopolies to coordinate prices and enforce them in markets. In order to prevent this, bad faith would have to be proven – and that’s where the problem begins.
The practice works like this: Gas station tenants pass on the prices of their competitors in the area to their corporate headquarters. There the data is collected and petrol prices are set for all petrol stations of the mineral oil company in Germany. At the push of a button, the head office changes the regional prices on the display boards at the petrol stations and the petrol pumps. Prices used to rise sharply before public holidays and school holidays, and also on Monday mornings. In the meantime, they’re going crazy every day and the gas station tenants can’t seem to keep up with the observation. In any case, differences of up to ten cents within a radius of a few kilometers are possible.
In the past, the coordinated price jumps always triggered a discussion about what could be done about it. The roles and arguments are traditionally distributed: Politicians complain about the lack of market transparency and the lack of competition in the German mineral oil industry. Automobile clubs like the ADAC and consumer advocates denounce the greed of Aral and Co. And the scolded corporations, through their interest groups, blame politicians for the rise in prices – because of the high taxes.
At the time, Rösler wanted to put an end to this behavior with a “market transparency office”. It collects purchase and sales prices for petrol and diesel. In this way, the cartel authorities could find indications of possible violations and “easier to uncover and pursue abusive behavior on the part of the large mineral oil companies,” claimed the then Economics Minister. The new authority came, it is now a department of the cartel office, the old problem remained.
None of the big mineral oil companies have any interest in permanently outdoing their competitors with dumping prices, the functioning model of observing the competition is much more profitable in the long run. In addition, the mineral oil producers jointly operate refineries and sell crude oil and petrol to each other. However, the providers do not make direct agreements.
In any case, there is no evidence of this. “It works like in a long-term marriage, so the partners can rely on someone else to make breakfast the next morning, even without making arrangements. Aral and Shell are almost always the first to raise prices. The other providers will follow after exactly three or five hours,” said the President of the Cartel Office, Andreas Mundt, in an interview. “Anyone who raises prices hardly takes the risk that customers will switch to the competitor.”
It’s a copy and paste system. The competition authorities cannot change it. Fixing prices is forbidden, but analyzing the market is not. The mineral oil industry association also refers to this again and again. The system also works in other countries – and causes trouble there too.
The Austrian cartel authority has therefore already intervened in its own country and stipulated that petrol stations may only increase prices once a day. However, this only made it easier to copy and imitate the prices. It hasn’t changed anything.
In Western Australia, petrol stations are required to report their prices for the coming day and then not change them for 24 hours. All prices are published on the Internet. Customers can be sure that they will find the price at the pump that they have researched on the Internet. This makes it easier for drivers to compare the prices of different providers.
Cartel Office President Mundt doesn’t think that’s bad. By fixing the price the day before, the previous fixed system of price adjustment is broken up, since the competitors can no longer learn from each other. However, Mundt was unable to implement the model.
The director of the employer-related Institute of German Economics, Michael Hüther, does not believe that Habeck will be successful with his plans. He also thinks the approach is wrong. “Minister Habeck tries to clean up the wrong thing with the wrong thing,” said Hüther in an interview with t-online.
Hüther speaks of a narrow market structure in which prices adjust quickly. As an economist, he sees a signal effect in the prices. They show drivers that there are supply bottlenecks and that it makes more sense to save fuel. “This price mechanism is extremely important for the energy transition,” says the economist, delivering an argument that gives the Green Economics and Climate Minister Habeck food for thought.
