German Economic Minister Katherina Reiche defended her strategy to bolster fossil fuel infrastructure on Sunday, rejecting calls to seize Russian-owned refineries while insisting Germany must prepare for further energy supply shocks.
The CDU politician, speaking to both WELT AM SONNTAG and Die Zeit, argued that nationalizing assets like the PCK refinery in Schwedt—currently majority-owned by Rosneft and under federal trusteeship—would send a damaging signal to private investors. “If the state starts picking out individual plants from privately operated refineries, it tells them: ‘You are not safe here,’” she said. “That harms the location.”
Reiche emphasized that Germany’s reliance on oil and gas remains structurally deep, with fossil fuels still accounting for about 60 percent of the national energy mix. She noted that the chemical industry and fertilizer producers depend directly on crude oil deliveries, making refineries “of extraordinary importance” to the country’s industrial base.
Her comments come amid renewed volatility in global energy markets. Since the start of the Iran conflict in late February, kerosene prices have doubled, prompting Lufthansa and other carriers to cancel tens of thousands of flights. While Reiche acknowledged the strain on households and businesses, she rejected subsidizing jet fuel, warning it would “distort price signals” and encourage wasteful consumption of a scarce resource.
For more on this story, see Over 80,000 Protest in German Cities Against Energy Minister’s Gas-Favoring Renewable Policies.
She also pushed back against demands from her SPD coalition partners for a windfall profits tax on energy firms, calling it fundamentally flawed. “To stigmatize profits as such removes the essential driver of the social market economy,” she stated, adding that such a tax could lead to needed gasoline being exported rather than used domestically—“the opposite of what we want.”
On the 100-euro energy relief allowance, which employers can pay tax-free to workers, Reiche expressed understanding for criticism but affirmed the coalition’s commitment. “I can comprehend the frustration. Some companies can afford this; many cannot,” she said. “But we agreed on this measure in the coalition and are implementing it together.”
Regarding the threatened halt of Kazakh oil via the Druzhba pipeline to Schwedt, Reiche remained confident Germany could absorb the blow. “Should these volumes disappear, PCK’s output would dip slightly—but we are not left empty-handed,” she said, noting ongoing talks with Poland and Kazakhstan to secure alternative supplies. She framed the situation as familiar: “This represents not the first time Russia has used energy as a weapon.”
This follows our earlier report, German Government Halves 2026 Growth Forecast to 0.5% Amid Iran War Impact.
Why does Reiche oppose nationalizing the Schwedt refinery despite its Russian ownership?
She argues that selectively seizing private assets would undermine investor confidence in Germany’s energy sector by signaling that no facility is safe from state intervention, potentially deterring future investment.
How does Reiche justify resisting a windfall profits tax on energy companies?
She contends that taxing profits outright undermines the social market economy’s incentive structure and risks causing domestic fuel shortages by incentivizing exports of needed gasoline.
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