Energy prices have risen strongly recently, and conse-quently become a controversial issue in economic policy.The rises are due to a number of factors _ turbulence onthe international oil market and its effects on otherenergy markets, price increases for environmental rea-sons and delays in liberalising and regulating electricityand gas supplies.International oil prices reached a record level inOctober 2004. Coal prices followed, as did gas pricesafter a delay of a few months. Moreover, energy pricesin Germany are relatively high by European compari-son, for both private households and industrial custom-ers. While the differences in fuel prices are almostentirely due to higher taxation, there are other reasonsas well for the increases in prices for electricity and gas