In view of the new record high for diesel prices, German SMEs have warned of drastic consequences for the economy and consumers.

At the end of the year, the corona crisis "threatens to be seamlessly replaced by a veritable economic crisis, while other European countries are recovering economically around us," said Hans-Jürgen Völz, chief economist of the Federal Association of Medium-Sized Enterprises (BVMW), the newspapers of the Funke media group (Tuesday editions). 

"The explosion in fuel prices is putting a massive strain on the economy, endangering jobs, growth and prosperity," explained Völz.

It can already be seen now that the additional costs for transport, heating and material passed on to consumers with a delay will lead to higher wage demands.

"From the point of view of medium-sized businesses, the mineral oil tax should be temporarily reduced and the commuter allowance increased noticeably."

"The wage-price spiral is already in motion."

The diesel price had risen to an all-time high on Sunday.

According to the ADAC, drivers had to pay a nationwide average of 1.555 euros per liter, which is more than ever before.

The price of petrol also rose sharply, with premium petrol approaching its all-time high.

A large part of the price of fuel is made up of taxes and duties.

The energy or mineral oil tax amounts to 65.45 cents per liter for premium petrol and 47.07 cents for diesel.

Added to this is the VAT.

The price of crude oil and the exchange rate between the dollar and the euro are decisive for the development of fuel prices.

The price of crude oil is currently lower than it was in 2012, but the dollar is significantly stronger than it was nine years ago.

That makes oil imports to Europe more expensive. 

The CO2 tax introduced at the beginning of the year also plays a role, which, according to ADAC, has an impact of around seven to eight cents per liter when refueling this year.

In the case of diesel, the rising demand for heating oil in autumn also increases the price at the pumps.

Medium-sized economist Völz also worries that unions could enforce higher collective bargaining agreements.

"It is already evident that the additional costs for transport, heating and materials passed on to consumers with a time lag will lead to higher wage demands," he said.

"In any case, the wage-price spiral is already in motion."

In this context, monetary watchdogs speak of a “second-round effect”: If rising inflation leads to higher collective bargaining agreements and thus wage costs, this in turn can fuel inflation.