BERLIN, June 13 (Xinhua) -- A fuel discount introduced by the German government two weeks ago has failed to significantly lower diesel and gasoline prices at gas stations.
These prices have hit record levels of over 2 euros (2.09 U.S. dollars) since the start of the Russia-Ukraine conflict.
However, German Minister of Finance Christian Lindner said on Monday that gas prices in Germany would be "significantly higher" without the tax discount.
To counter soaring energy prices, the government lowered tax on fuel for vehicles by 14 euro cents per liter for diesel, and by 30 euro cents for gasoline. As a result, the Ministry of Finance (BMF) expects tax revenues to drop by more than 3 billion euros.
Despite the dampening effect of the tax reduction, Lindner said that other developments on the world market, combined with a strong U.S. dollar and shortages at refineries are also affecting prices.
Leading economic experts have criticized the policy as ineffective.
Marcel Fratzscher, president of the German Institute for Economic Research (DIW Berlin), said the fuel discount would benefit oil companies and should be immediately stopped.
"Direct transfers to the people are more useful than tax cuts or subsidies," he added.
As in some other European countries, politicians in Germany are considering a windfall tax on oil and gas companies. Britain has already announced plans to introduce such a tax, after London-based oil giants Shell and BP posted record profits in the first quarter of the year.
Germany's Minister for Economic Affairs and Climate Action Robert Habeck also supports such a tax, but said he does not think the idea would receive majority support in the current governing coalition, as the liberal party (FDP) opposes the introduction of such a tax.
Instead, the country's cartel office should be empowered to act against relevant companies, he said.
"We are making an antitrust law with claws and teeth," Habeck told Deutschlandfunk radio. (1 euro = 1.04 U.S. dollars)