Economist Professor Ottmar Edenhofer argues that the temporary reduction of fuel prices, starting May 1st, will only grant motorists a brief reprieve before contributing to a further upward price spiral for oil and gas. Speaking to the “Redaktionsnetzwerk Deutschland”, the chief economist at the Potsdam Institute for Climate Impact Research (PIK) stated that, in his view, the fuel discount is the wrong policy measure.
Edenhofer explained that instead of helping to reduce imports, the subsidy will stimulate demand for oil and gas. This, he warns, results in increasing prices, which benefits foreign exporters but ultimately harms the very people who drive and heat their homes. He suggested that, rather than adjusting fuel prices, the government would be better off protecting citizens from rising costs through income support programs, focusing particularly on vulnerable or hard-hit demographics.
Furthermore, the professor criticized the government for failing to openly communicate the necessity of lowered oil and gas consumption for energy security. He noted that policies should have addressed this need proactively, rather than resorting to actions like blocking the Strait of Hormuz. Recalling the oil crises of the 1970s, Edenhofer pointed out that the appropriate public response at that time was energy conservation, not price subsidies. He remarked that it is absurd that the government today fears communicating this vital need to the public.
Looking forward, Edenhofer insisted that Europe must curb its demand in the medium term to achieve greater independence from foreign oil and gas supplies. He noted that reducing demand would provide significant international leverage, aiding efforts to stabilize and lower global oil and gas prices. He emphasized that this necessary structural shift is not merely a matter of climate policy, but also a crucial geopolitical imperative.