Economist Grimm Warns Against State Fuel Discounts, Argues Price Cuts Backfire

Economist Grimm Warns Against State Fuel Discounts, Argues Price Cuts Backfire

Veronika Grimm, a respected economist, has cautioned against state‑backed measures to lower fuel prices. She advised the “Redaktionsnetzwerk Deutschland” that a tank discount “is definitely something to avoid”. Grimm argues that cutting prices sends a wrong signal, especially since we are already facing a scarcity situation. Global oil and liquid gas shipments are expected to decline markedly, with 20 percent of worldwide transport routed through the Strait of Hormuz. “Therefore we must keep incentives high to curb demand; otherwise we will only worsen the crisis” she said.

More broadly, Grimm opposes government intervention during crises, stating that people need to understand that the state cannot cover every risk. She warned that solving problems through state action would burden the younger generation at a time when they already face enormous debt and misallocation of resources. There is little room left for additional borrowing.