Good news for Putin: the fuel discount is an expensive mistake

The traffic light coalition countered high petrol prices with a tank discount.

Good news for Putin: the fuel discount is an expensive mistake

The traffic light coalition countered high petrol prices with a tank discount. The only good thing about the measure is that it is temporary. The Kremlin should be happy.

The federal government wants to relieve the population in view of the high energy prices and is therefore introducing a tank discount on June 1st. That's not a good idea. Because this discount is expensive, unfair and creates the wrong incentives.

It is of course right to relieve low-income households. But the tank discount also benefits many who do not need it at all. The more you drive, the bigger the car, the bigger the discount. Ifo boss Clemens Fuest calls the measure a redistribution from bottom to top. This is not fair and efficient help.

The traffic light sells the discount as a relief for commuters. But in doing so, they are largely subsidizing the petrol of higher earners. Instead, it would make sense to only and above all help as many low-wage earners as possible more than before – in a targeted manner and regardless of whether they have a car or not.

The coalition assumes that the rebate will cost 3.5 billion euros and calls the distribution of tax money according to the watering can principle "unbureaucratic". That's a nice euphemism when you throw the coal out of the window with your hands full - in the hope that it will somehow relieve the right people noticeably.

In addition, the tank discount is counterproductive. It ensures that you don't drive less and therefore don't use less fuel. But the opposite must be achieved: save oil, firstly to become less dependent on Russia and secondly to do less damage to the climate.

Fortunately, the discount is only a temporary measure. But it does not bode well for how the traffic light will continue to react to crises in the future. She will knock out money according to the motto "a lot helps a lot".

Prices have an important steering function. It is usually a mistake to manipulate them. If Germany wants to make itself less dependent on Russian oil and gas, it should use as little of it as possible. A high energy price leads in this direction because it encourages energy saving. If the state compensates for the higher costs, the incentive to save is lost.

That doesn't mean that those who depend on the car shouldn't be relieved. However, it is generally wrong to take away the signal effect of prices. This was impressively shown, for example, with the grandiose failure of the Berlin rent cap. Above all, it relieved the tenants of expensively renovated apartments in the most sought-after locations. And he made it even less attractive to build apartments in Berlin and thus create more affordable living space. Against this background, it is somewhat bizarre that the tank discount is an idea of ​​the FDP. Otherwise, it is committed to the principles of the market economy – for good reason.

Party leader and Federal Minister of Finance Christian Lindner still referred to renewable energies as "freedom energies" after the Russian attack on Ukraine. Now he is using tank subsidies to ensure that the demand for petrol remains high, and may even increase. This is good news for Russian President Vladimir Putin. The proceeds fill his war chest, which he uses to finance the fight against freedom.

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