Germany’s Federal Minister for the Economy, Katherina Reiche, has warned of an impending fuel shortage if the Iran war drags on for much longer.
Speaking at the energy conference Ceraweek in Houston, Texas on March 24, Reiche (Christian Democratic Union, CDU) said prices for petrol, diesel and jet fuel had rocketed due to the war, adding: “We are not yet seeing any shortages in terms of volume, but if the conflict does not end, we expect this to happen around the end of April or in May.”
This is a noted deviation from previous statements. On March 20, Reiche’s ministry said the fuel supply was secure.
The Association of the German Mineral Oil Industry (En2x) seconds Reiche’s warning. Spokesman Alexander von Gersdorff told Brussels Signal today: “The minister is right to warn of further potential consequences of the conflict. No one knows how this conflict will unfold in the medium term.
“Supplies are currently secure. There is currently no threat of supply shortages for petrol, diesel or heating oil.
“However, global supply has already become significantly more complex due to the conflict in the Middle East. The supply of diesel in particular is becoming increasingly scarce because both crude oil and diesel supplies from the Middle East have been disrupted,” Gersdorff said.
Conversely, a spokesman for the German Association of Gas Stations told Brussels Signal he thought Reiche’s remarks were “very bold”. He added: “Germany imports very little oil from the crisis region. I don’t see any risk of a supply shortage. The ever-rising price is the greater risk.”
Reiche also warned of potential negative effects for Germany’s economy from rising fuel prices.
According to estimates by German think-tank IW Cologne, an oil price of $100 per barrel of Brent crude could cost Germans an additional €40 billion in added costs – which in turn could fire up inflation to the tune of 0.8 to 1.0 percentage points per year.
“Our small, fragile recovery of the German economy is under pressure,” Reiche warned.
Yesterday, she said in a video statement that the situation in the Middle East remained serious and that energy supplies were still tense.
She pointed to measures the government of Chancellor Friedrich Merz (CDU) had taken to supposedly ease price pressure on the economy: “We have quickly put together a first package of measures. Now gas stations are only allowed to raise prices once a day.”
Reiche also said her government would push ahead with expanding renewable energy in Germany, specifically by providing a “boost” to build more wind turbines.
The German Government has also used part of its strategic oil reserves to counter rising prices.
