Such a rise in gasoline prices has rarely been seen: fuel prices have risen by around a quarter over the year, to more than 1.50 euros per liter for gasoline and 1.36 euros per liter for diesel.

The jump in prices fueled inflation in Germany and made a major contribution to its rise to 2.5 percent.

Christian Siedenbiedel

Editor in business.

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    That is reason enough for economists to take a closer look at the causes and consequences of price changes. After all, the price of petrol is to become an important control parameter for climate protection in the future - politicians are struggling to determine how much petrol has to be made more expensive in order to bring the climate footprint of traffic to an acceptable level. The Green Chancellor candidate Annalena Baerbock brought 16 cents per liter into the conversation and thus triggered a heated discussion. In addition to the ups and downs in the price of oil and the demand for energy during the pandemic, two factors have recently made petrol more expensive in Germany: the new CO2 price for climate protection and the renewed increase in VAT. The Munich economist Monika Schnitzer, member of the Economic Advisory Council,has now investigated together with Felix Montag and Alina Sagimuldina what both mean for motorists: How did the mineral oil companies pass the CO2 price and the tax on to consumers?

    Tax increase is passed on more than tax decrease 

    In the study, which the FAZ has received in advance, they come to remarkable results: On the one hand, the renewed increase in VAT and the introduction of the CO2 price since New Year's Eve have been passed on to motorists to a much greater extent than when the tax was cut in July was the case in the opposite direction last year.

    The petrol stations and oil companies have passed the higher prices on to consumers more than the cost savings they made last summer.

    On the other hand, there are clear differences between gasoline and diesel. The price of diesel fuel reacted more strongly to the tax cut than to the renewed increase. Diesel drivers are more price-conscious, is the interpretation of economists: They pay more attention to the price at which they fill up. That makes it harder for the gas stations and oil companies to get a high margin on sales. Therefore, with diesel, both cost reductions, as in the previous year, and higher costs, as now, would be passed on more to the motorists.

    Schnitzer cites the possible reasons for the striking differences between the two types of motorists that diesel drivers are often frequent drivers. In addition, they had tended to spend more on their car when they bought it, and were therefore more concerned with bringing in the higher acquisition costs through lower consumption prices. It can be proven that diesel drivers use more comparison apps to find the cheapest petrol station.

    Ultimately, according to the study, when the value added tax was cut in the previous year, the pass-through rate was passed on to motorists for diesel at 79 percent.

    But 92 percent of the tax hike and the CO2 price were passed on.

    In the case of Super E10, 52 percent of the tax cut was passed on, but 75 percent of the increase.

    Motorists will not like it - the intention of politicians to make refueling more expensive, however, worked.

    Gasoline sales fell significantly

    How did motorists react to the sharp rise in prices? Here, too, the experience from the price increase in the first few months of this year is interesting as a laboratory for the future use of the gasoline price as a control parameter in the fight against climate change. Calls for a "gas station boycott" against the high prices like in the expensive autumn 2018 fuel tank were nowhere to be heard. However, the mineral oil industry association, which represents the oil companies, reports significantly lower gasoline sales in the first three months of this year compared to the same period last year. Gasoline sales fell by 12 percent and diesel sales by 14 percent. However, this sharp decline is largely due to the consequences of the lockdown. In the first quarter of last year, the corona measures did not play such a major role,in the first quarter of this year. Lots of people didn't go to work, missed vacations and even visiting relatives. It therefore makes sense to compare sales in December 2020 (shortly before the introduction of the CO2 price) and in January 2021: there, too, in the middle of the pandemic, there was a further decline that, according to the association, did not occur in other years would have. Gasoline sales fell from 1.3 million to 982,000 tons, and diesel sales from 2.8 million to 2.2 million tons.which, according to the association, had not existed in other years. Gasoline sales fell from 1.3 million to 982,000 tons, and diesel sales from 2.8 million to 2.2 million tons.which, according to the association, had not existed in other years. Gasoline sales fell from 1.3 million to 982,000 tons, and diesel sales from 2.8 million to 2.2 million tons.

    How much of it is related to Corona and how much to the price is not that easy to separate. The RWI research institute has a rule of thumb for this: Many years of experience have shown that the so-called price elasticity of demand for gasoline in Germany is around 0.4. “That means that if fuel increases in price by 10 percent, consumption decreases by 4 percent,” says Manuel Frondel, energy specialist at RWI. If the gasoline price has risen by around 27 cents per liter since the beginning of the year, a price increase of 21.6 percent, this should trigger a demand reduction of almost 9 percent after this elasticity, says Frondel. A clearly visible effect. "The rest would be assigned to Corona," the researcher sums up.