Pumped out

Anyone who drives a car to work and once a week for shopping, or takes a longer trip twice a month and goes on vacation each year is probably annoyed by the record fuel prices at the pump. For a typical car using around 1,500 liters (396 gallons) throughout the year, a long-term gasoline price increase of 20 cents would mean additional costs of 300 euros.

These are the figures for private consumers. Companies cannot calculate this way, says Hubertus Bardt of the Cologne Institute for Economic Research. Business is generally "less dependent on the individual price of gasoline than the sum total of energy prices. So this is the larger economic risk," the economist told DW.

Taxi drivers hit

But there are some businesses that are suffering greatly from the record fuel prices for fuel - taxi companies, for example. Unlike private cars, taxis are in almost constant use.

In general, they work in shifts, meaning eight hours with one driver before another driver takes over for the next shift. For example, Bonn taxi company owner Claus Trautmann operates six cars. And each car, Trautmann says, "runs about 80,000 kilometers per year."
The journeys the company makes are short - taxis generally travel in gas-guzzling traffic in city centers. Claus Trautmann's vehicles have an average consumption of 9.2 liters per hundred kilometers. A price increase of 20 cents per liter means that the annual fuel bill for each car goes up by 1,500 euros, or 9,000 years annually for Trautmann's entire fleet.

No leeway on price

Bardt knows that some sectors are hit particularly hard. The whole transportation sector has been affected, he says, but while "the transport sector can pass on prices increases to customers, taxis cannot."

Taxi companies are prohibited from setting their prices themselves. The fares must be approved by the city and then usually apply for one year. This year, the city of Bonn approved a rate increase of six percent for the taxi drivers - but that was before prices shot up at the pumps.

Despite the jump, taxi operators could not just raise prices, Trautmann said. Taking a taxi in Germany is an expensive proposition now, and if the prices continue to rise, he believes the customers will stay away.

Job fears

The price explosion at the pumps is a real threat to many small businesses. When asked whether he fears for the future of his company, Claus Trautmann replied only after a pause, "Yes, I do. It's been very hard for us."

However, economist Hubertus Bardt is not pessimistic when it comes to the German economy as a whole. He says he does not expect a wave of bankruptcies and sees no "significant economic difficulties due to this one effect" for Germany.

A silver lining

Bardt points to the other side of the coin: Higher fuel prices lead to higher tax revenues. When the fuel price rises, so does the income from the petroleum tax, the so-called ecotax and value added tax. At least the Finance Ministry benefits from the current development.

Another trade-off is clear, Bardt says, because the German economy is extremely dependent on exports. In countries such as Germany, which are dependent on oil imports, the economy will suffer. But other economies that benefit from rising oil prices, in turn, have increased purchasing power. They then tend to buy more goods - including those from Germany.

Bardt is calm: "Taking the economy as a whole, we have costs on the one hand, but also benefit on the other hand and therefore have no reason to panic."

Author: Dirk Kaufmann / sb
Editor: Greg Wiser