Germany Limits Fuel Price Hikes as Iran Conflict Drives Surge

BERLIN, March 26 (Reuters) - Germany's lower house of parliament approved on Thursday initial measures to curb surging fuel prices in Europe's biggest economy after the Iran conflict has pushed prices sharply higher.

Under the legislation, petrol stations will be permitted to increase prices only once daily, at 1200 local time (1100 GMT), while reductions may be made at any time. Breaches could be punished with fines of up to 100,000 euros ($108,000).

The bill also tightens antitrust rules in an effort to increase transparency in fuel pricing. Further steps are already under discussion within the ruling coalition of Chancellor Friedrich Merz's conservatives and the Social Democrats.

Fuel prices of well above 2 euros per litre have become increasingly common in Germany since late February, following U.S. and Israeli attacks on Iran and Iranian retaliatory strikes on Gulf states. Economists now expect inflation in Germany this year to run closer to 3% than the 2% previously forecast.

Germany's cabinet approved the legislative package in mid-March, and it is due to take effect by early April after clearing parliament. The measures are to be reviewed after one year.