To prevent the collapse of natural gas suppliers, Berlin allows them to pass on to consumers 90% of the losses from the closing of the Russian tap.
Consumers have known for some time that they will be asked to pay the “brokens” of the gas price rally. However, it remains unknown how deep they will have to put their hand in their pocket in the end. Today the German economy ministry opened its papers on how it plans to pass on to citizens the increased cost of natural gas, which is currently borne by the providers: with an extraordinary levy effective from October to March 2024.
Vice-Chancellor and Minister of Economy in charge of Energy Robert Hambeck said that every household will be forced from next October to pay in addition to the already increased prices from 1.5 and up to 5 cents per kilowatt hour. Given that a family of four consumes approximately 20,000 kilowatt-hours per year, the cost will reach, according to first calculations, from 500 to 1,000 euros.
Where does the new charge come from?
When Russia began to turn off the tap gas importers such as energy giant Uniper were forced to source more expensive gas from elsewhere. Under the contracts, however, they were not allowed to pass on their financial losses to consumers. However, with the government’s decision, they can do so from October. The charge is necessary, the German Ministry of Economy declares, to ensure the supply of gas in the coming winter. Without it, natural gas providers would risk collapse.
According to the government decision, natural gas providers will be able to pass on 90% of the additional cost to citizens, and in fact at the same amount per kilowatt hour, regardless of the provider with whom they have signed a contract.
The president of the German Institute for Economic Research Fratcher estimates a tripling of the cost of heating with natural gas compared to 2021 and is in favor of financial support for the economically weaker. We remind you that Chancellor Olaf Solz recently promised that he will not leave any citizen to his fate. Berlin is planning, in addition to the rent increase, a one-off payment of 300 euros to each employee in September as well as a payment of 100 euros for each child in July.
Stefanos Georgakopoulos (dpa)
Source: Deutsche Welle
Source: Capital
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