Chancellor Friedrich Merz said his coalition will take action on “price gouging” by gas suppliers and promised German motorists relief amid mounting calls to alleviate the burden on consumers from surging fuel prices. "The situation in the Middle East is escalating, energy prices and fuel prices at the pump are rising," Merz told a business conference on Tuesday in Berlin. "For many people who need their cars daily, a breaking point has been reached." The coalition is reeling after an overwhelming election victory by Germany’s far-right party this month, with many voters listing rising prices as a reason to defy the country’s political establishment. Senior officials and lawmakers in the governing alliance have begun to call on action to keep prices in check. Merz said his government is working with state authorities to come up with a policy plan, but didn’t lay out what concrete measures his government is planning. "The exact instruments have not yet been determined," he said. "However, you can expect us to present a proposal very soon." The government approved a fuel-tax reduction earlier this year after the US-led war on Iran sent prices skyrocketing.

Those measures lapsed at the end of June, spurring criticism that the action was only temporary. The measures were also scrutinized for lacking benefits for low-income earners particularly affected by surging prices at the pump. Energy prices were a primary driver of German inflation last month, with consumer prices gaining an annual 2.9% in August compared with a 2.8% gain the previous month.