Reiche's draft ties Germany's fuel price cap to EU price gaps from 2027

Draft terms and trigger

The Federal Economy Ministry under Katherina Reiche (CDU) has drawn up a first draft law for a fuel price cap, reported first by The Pioneer and Handelsblatt and picked up on Monday, 2 November 2026. The draft is still at an early stage, in the Frühkoordinierung, the first step of coordination across the federal government. It would create a legal basis for a cap without introducing one automatically. Under the draft, the government could switch the cap on only if petrol and diesel each rose by more than five percentage points above the average increases in other EU states for three consecutive weeks. Petrol and diesel would each get their own maximum price, and the law would take effect on 1 January 2027 for three months only.

Weekly checks, exceptions and penalties

According to Politico, quoted in the draft coverage, the Market Transparency Unit at the Federal Cartel Office would check the trigger conditions every week, starting with data from the second full week of January. The federal government and the Länder could suspend the cap if supply problems threatened. The Länder would be allowed to set maximum prices that differ from the national one, both higher and lower, including for individual districts or smaller areas. Politico cited regional price differences of up to ten cents per litre. Media reports said violations could bring fines of up to 100,000 euros for petrol station operators and up to 500,000 euros for those responsible for setting prices in companies.

Coalition deal and the Iran conflict

In mid-September the leaders of the CDU, CSU and SPD coalition agreed to talks with the oil industry aimed at a cap by 1 January 2027, modelled on Luxembourg or Belgium. The coalition described the measure as 'not permanent' and 'crisis-related', pointing to the Iran conflict that triggered the price jumps. Handelsblatt linked the increases at German petrol stations to the blocking of the Strait of Hormuz by the Iran war. The SPD had pushed hard for the cap, and the Finance Ministry under Lars Klingbeil had reportedly prepared its own draft in case Reiche did not deliver quickly. The Tankrabatt, the fuel tax cut that lowers taxes on petrol and diesel, runs out at the end of December.

Reiche's objections and the ministry's supply argument

Shortly before the coalition committee's decision, Reiche had said she considered a price cap the wrong path, because it would weaken the medium-sized refinery sector. She stressed the importance of refineries in Germany.

“We urgently need our refineries, because they produce diesel, petrol, heating oil and kerosene in Germany.”

The ministry itself warned that a cap set too low could make deliveries uneconomical. It also argued that procurement and transport costs and competition differ considerably within Germany, so a single national maximum could work differently from region to region. Handelsblatt reported that Hungary had earlier scrapped a price cap after traders stopped delivering enough fuel into the country.

“If maximum prices are set too low, fuel deliveries can become uneconomical. Imports could fail to materialise and supply shortages could arise.”

What comes next

The timeline below runs from the mid-September coalition agreement through the planned start of the law on 1 January 2027.

The draft remains subject to coordination within the federal government and has not yet been adopted. The first weekly check is set to use data from the second full week of January. Whether the cap is ever applied depends on whether petrol and diesel rise more than five percentage points above the EU average for three weeks in a row.