Government to revisit Germany's gas levy regulation amid wide criticism

The German government will revisit the recently adopted regulation to introduce a levy to help gas importers affected by supply cuts from Russia, amid growing criticism about well-off companies pocketing gas consumer money, reports Die Welt. The government introduced the levy for gas consumers to help importers avoid bankruptcies and prevent large-scale distortions to the market. 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. However, the regulation was criticised for allowing all affected companies to seek the support even if they do not need it - and perhaps make record profits with their energy business as prices on the world markets have risen sharply. Economy minister Robert Habeck said that while it is correct that businesses are equal before the regulation, “it is certainly not morally right that companies that – let me put it in plain German – have earned a pile of money, then also say: ‘Yes, and for the few revenue losses that we have, we ask the population for help, they should also give us money’.” The minister said the government would “take another close look to see if we can find a legally secure way to end the improper claims by these companies”, reports Welt. However, Habeck cautioned that changing the rules for the levy revenues could now lead to companies taking legal action. Should the levy then have to be abolished, some companies would face the risk of insolvency yet again, which could lead to a collapse of gas supply in Germany.

Germany’s new gas levy, which is scheduled to enter into force on 1 October, will be set at 2.419 cents per kilowatt hour (ct/kWh). Researchers found the levy, which is scheduled to remain in place until 2024, could further speed up inflation and begin to bite with full effect once current relief measures for energy costs run out later this year. Politicians from the ruling coalition, as well as from the opposition parties, demanded changes to the mechanism. FDP energy expert Michael Kruse, for example, demanded stricter criteria for the eligibility of companies.