Big Oil In The Crosshairs Of The German Government

Bertel Schmitt
by Bertel Schmitt
big oil in the crosshairs of the german government

If you are a large company in Germany, there is no government agency that you fear more than the Bundeskartellamt. It’s the anti-monopoly police. Being audited by the Finanzamt, the German equivalent of the IRS, is considered paradise compared to being in the cross-hairs of the Monopol-Polizei. Europe’s large oil companies are in the cross hairs and are just about to be shot.

According to a three year study conducted by the agency, five large oil companies dictate the gasoline prices in Germany: Aral/BP, Shell, Jet, Esso and Total. Together, they hold 70 percent of the market and form a „market dominating oligopoly.”

Kay Weidner, speaker of the Kartellamt, confirmed to Auto Bild that the result of the study confirms “that there is such an oligopoly.”

The government agency does not allege price fixing – yet : „That is a different project,“ Weidner says ominously. According to the study, the big five have a price monitoring system. It makes price fixing superfluous. „Price fixing is against the law, copying prices is not,” said a manager of the oil industry.

Last month, a liter of super did cost €1.62, that’s $8.62 a gallon. There is pressure on the government to intervene, and the government seems to want to intervene.

Intervention begins at home: 57 percent of the price, that would be $4.91 a gallon, goes into the pockets of the German government as taxes.

Predictably, that was the answer of Big Oil: If the government wants lower prices, it should lower taxes, said Klaus Picard, Managing Director of the German Association of Mineral Oil Producers.

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  • HerrKaLeun HerrKaLeun on May 24, 2011

    Zackman: I'm not sure if the % of taxes properly account for property tax (doesn't exist in Germany) and social security etc. I've been in the US working for over 8 years in total and still haven't figured out which government screws you more. Yes, German taxes may be higher but: - in Germany you get (almost) free college education and interest free student loan for living expenses. I gladly pay more taxes, but no student loan - the US borrows and prints more money... this will be paid by our children. with just printing money and moving that expense int eh future, it is easy to have less taxes (in the present) - universal health care makes you not lose your house when you get sick - there are actually good streets, railway etc. available. The world is not a black and white as you imagine by reading a % number.

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    • Charly Charly on May 24, 2011

      @jmo Since this year the Polish and other Eastern Europeans are allowed to work in Germany so i would expect a fast growing population in Germany. There is also a big difference between West and East German demographics. East Germans demographics are much better which leads to a situation that when you take Germany as a whole the population in 2050 is much lower than the combined population of West and East Germany in 2050 PS. 2050 is in 40 years. Half the people who life than haven't even been born yet.

  • Jmo Jmo on May 24, 2011
    but not collecting German style benefits which we are far too broke to finance. Why does this myth persist? US Debt as a % of GDP 58% German Debt as a % of GDP 83%

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    • Jmo Jmo on May 24, 2011

      @charly We're talking about debt held by the public. Germany keeps all their unfunded pension and healthcare liabilities off the books. We only keep some of ours off the books.

  • Dartman Dartman on May 24, 2011

    Slightly OT...seeing the signs for gas 1.45euro($2.04)/liter...made me remember back in the 70's the big push to convert to the metric system--things were going fine with quick acceptance of one liter and two liter soft drinks, speedometers were being converted as were highway distance signs to km...and then the oil industry converted the pumps to liters and no one could figure out "how much a damn gallon of gas cost..." I am convinced this one obstacle effectively killed metric conversion in the U.S. for a long time...

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    • HerrKaLeun HerrKaLeun on May 24, 2011

      @WRohrl prices always are set by demand and supply... the effects you mention are short term. It also happened at that time that regular inflationary adjustments were done at that moment. Everything that was paid per contract (rent, loans, electricity etc.) was converted correctly Many of the scandalous prices (a cucumber 1 Deutschmark, and the next day 1 euro) didn't stand up long since people didn't buy them. All you had to do is not buy that damn thing in the first week. I was a poor student at that time and didn't really feel a tangible increase in price (besides a few items that I just skipped). People just liked to complain....

  • Jmo Jmo on May 24, 2011
    a German pension doesn’t really exist, it is paid from current (and future) tax revenue note - moved this comment to HerrKaLeun as it didn't format properly We won't even start on Germany's demographic situation. As I understand it, with it's current birth rate, Germany's population will fall by 34% by 2050. From the good people at destatis the German Federal Statistics Office,property=file.pdf