Eastern German States Reject Bundestag Fuel Law as Insufficient Amid Iran War Impact

Eastern German state leaders declared the Bundestag's newly passed fuel price legislation insufficient on Thursday, demanding deeper cuts to energy taxes and the seizure of oil company profits, after a meeting with Chancellor Friedrich Merz in Berlin. The heads of government from Mecklenburg-Vorpommern, Brandenburg, and Berlin warned that rising fuel costs, driven by the ongoing war in Iran, are threatening to undermine economic development across the region. The Bundestag passed the Fuel Price Adjustment Act on Thursday with votes from CDU/CSU, SPD, and the Greens, but eastern leaders said the measure falls short of what their states need. The law limits gas stations to a single daily price increase, set at noon, while reductions remain permitted at any time.

The war in Iran, which began on February 28, 2026, with U.S.-Israeli strikes under Operation Epic Fury, has sent fuel prices sharply higher across Europe. Germany reunified in 1990, and eastern German states have historically faced structural economic disadvantages compared to the west, a gap that Chancellor Merz acknowledged still persists more than 35 years after reunification. The eastern state premiers' conference, known as the MPK-Ost, meets periodically to coordinate regional interests and present unified demands to the federal government.

State leaders push for tax cuts and profit seizures Mecklenburg-Vorpommern Minister President Manuela Schwesig called the Bundestag package a step in the right direction but said it does not go far enough. „That is not enough for us. We also believe that, in the short term, fuel prices must be reduced by lowering energy taxes, alternatively the CO2 tax.” — Manuela Schwesig via Der Tagesspiegel Brandenburg Minister President Dietmar Woidke went further, demanding that the federal government simultaneously reduce levies and confiscate what he described as excess profits from oil companies, framing lower energy prices as essential to economic stabilization and new growth in the east. Berlin Governing Mayor Kai Wegner, a member of Merz's own CDU, backed the most aggressive proposal on the table. „We can imagine carrying out an appropriation of assets from the illegitimate profits of the corporations. We must do everything possible to ensure that people, especially those who also depend on a car, can still afford to drive.” — Kai Wegner via Der Tagesspiegel The alignment of a CDU mayor with SPD minister presidents on profit confiscation illustrated the cross-party pressure Merz faces from the east on the fuel issue.

New law caps price hikes once daily, fines reach 100,000 euros The Fuel Price Adjustment Act introduces a concrete operational restriction on how fuel retailers can set prices. Under the new rules, gas stations may raise prices for gasoline and diesel only once per day, at 12:00 noon, while reductions remain permitted at any time. The Federal Cartel Office received expanded powers under the act, allowing it to require companies to demonstrate that any noticeable price increases are justified by higher underlying costs. According to the articles, the new rule could enter into force before Easter. The measure passed with the support of CDU/CSU, SPD, and the Greens, reflecting broad parliamentary consensus that some intervention in the fuel market was necessary.

Fuel Price Adjustment Act: Key Changes: Daily price increases allowed (before: Unlimited, at any time, after: Once per day, at 12:00 noon only); Price reductions (before: Permitted at any time, after: Still permitted at any time); Cartel Office powers (before: Standard oversight, after: Can demand companies justify price increases)

Merz pledges federal commitment to eastern Germany's future Chancellor Merz acknowledged at the Berlin meeting that eastern Germany still carries economic structural weaknesses more than 35 years after reunification, even as he pointed to bright spots in infrastructure, research and development, and company start-ups. „What matters to me above all is to show that the federal government continues to be committed to eastern Germany.” — Friedrich Merz via Der Tagesspiegel Merz said a selection from a list of more than 100 proposals for so-called lighthouse projects — covering areas such as energy generation, infrastructure, and educational institutions — would be made by the summer holidays, with decisions to follow on how each can be brought to fruition. The chancellor also used the meeting to advocate for stronger rail connections between eastern Germany and neighboring countries in East-Central Europe, specifically citing the Czech Republic and Poland, and said the matter would be taken up again in the cabinet. He noted that both the Polish and Czech governments had raised the same concern with him directly. Schwesig framed the broader stakes clearly, warning that the billions committed through a special economic fund risk being negated by the fuel price surge. „We are very concerned to see that the economic consequences of the war in Iran are leading to such impulses being, so to speak, eaten up.” — Manuela Schwesig via Der Tagesspiegel