Merz rejects windfall profits tax as motorists face higher prices

German Chancellor Friedrich Merz rejects windfall profits tax on energy companies to address rising petrol prices in Germany.

Merz considers alternative options, including direct payments to private households, to ease the burden on consumers facing higher fuel costs.

SPD Finance Minister Lars Klingbeil advocates for a windfall tax on oil companies' excess profits to fund support for consumers, sparking discussions within the coalition government.

Chancellor Friedrich Merz sees various options to ease the burden from sharply rising petrol prices in Germany but has ruled out a windfall tax on energy companies, saying both the facts and the law are against this.

"I do not see at the moment a sufficient factual basis and also no legal basis for the taxation of so-called excess profits," the German leader said in Berlin. "So we will have to come up with something simpler, something else." Merz spoke at a press conference following talks with Iraqi Prime Minister Ali al-Saidi.

The beleaguered chancellor, who is facing ever lower approval numbers amid ever rising fuel prices, said the Finance Ministry is working on a mechanism for direct payments to private households. In the meantime, other options still needed to be discussed and there were proposals.

"We basically have several options," the chancellor said. "We can look at various taxes and levies to help consumers in Germany now."

SPD Finance Minister Lars Klingbeil is pushing for a windfall tax on extra profits by oil companies to finance support for consumers.

Merz said, "I see the need" for relief. "We will talk about this topic in the coalition and I also hope to come to solutions soon."