News
29 Jul 2022, 11:27
Julian Wettengel

Germany to introduce consumer levy on gas to relieve struggling importers

Reuters / dpa / ARD / Tagesspiegel Background

Germany will introduce a levy consumers would pay with their gas bills from 1 October to help importing companies pass on rising costs for the fuel, public broadcaster ARD writes, based on reports by news agencies dpa and Reuters. The levy is intended to pay for the extra costs that importers have to bear – due to the curtailment of Russian supplies – for the short-term and expensive procurement of alternative gas. It is planned to be in place until March 2024. The extent to which the gas price will rise for consumers remains open for the time being, as the initial amount of the levy will be published by mid-August, writes ARD. However, economy minister Robert Habeck said that the levy could reach between 1.5 and 5 cents per kilowatt hour (ct/kWh). With an average use of 20,000 kWh per year for a four-person family, additional costs would be in the middle three-digit euro range. “The bitter news is: it will certainly be a few hundred euros per household,” said Habeck. This means a higher burden on consumers that the state could not prevent, Habeck added. “But the people who are really driven into poverty by higher energy prices must be protected,” he said.

More than half of Germany’s homes are still heated with gas. Until now, final consumer prices often do not yet reflect the rising prices on the world markets, as customers have agreed fixed conditions for the fuel. Thus, the introduction of the levy is an additional incentive for households to save energy.

However, the economy ministry’s Board of Academic Advisors said this incentive comes much too late, reports Tagesspiegel Background. A “price shock” would be necessary immediately to make consumers save gas, they said in a press briefing. On the one hand, the now-planned levy only applies from October, while on the other, customers have different contracts, which means that some of the price increases will reach them even later, the advisors noted.

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