This increase is intended to allow importers to pass on price increases resulting from the war in Ukraine. However, the humblest of households will be helped.
The annual gas bill for German households will increase by several hundred euros due to the energy crisis, according to data published on Monday, but the government promises to cushion the shock as modestly as possible. From October 1, importers can charge 2.4 centimes more per kilowatt hour (KWh) of gas from companies and private individuals, the organization of network operators Trading Hub Europe (THE) announced on Monday.
Specifically, 2.4 cents per kWh including VAT means 600 euros more on the annual bill for a family with two children and an average consumption of 20,000 kWh. The sum is 480 euros without taxes. Berlin has pledged to “find a way” to exempt this additional levy from VAT, according to the Economics Ministry.
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The levy was introduced by the government until April 1, 2024 to support gas importers and distributors who have had to buy more expensively on the world market since the war in Ukraine and the drop in Russian supplies. It must be recalculated every three months.
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“The aim is to secure the gas supply after the German and European energy crisis triggered by the Russian attack on Ukraine,” the ministry said. In recent months, Germany has intensified its efforts to find alternative supply options. Before the war in Ukraine, more than half of the imported gas came from Russia. This proportion has now risen to 35%.
A promised “new aid package”
“Germany has developed a business model that is largely based on dependence on cheap Russian gas,” Economics and Climate Minister Robert Habeck said at a press conference. “It is a political mistake to be dependent on a ruler (…) who despises the rights of people and citizens,” he pounded.
In order to cushion the shock, the levy must and will “go hand in hand with a new aid package,” promised Robert Habeck. Germany has already provided €30 billion in aid to relieve individuals, including discounts at the pump or the popular €9 ticket that allows you to travel on public transport and regional trains for a month. However, the measure ends at the end of August.
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Berlin has also planned to inject billions of euros into Uniper, the leading gas importer and storage facility in Germany, which has been hit hard by the fall in Russian gas supplies since mid-June. Conversely, the RWE Group announced that it would not pass on the price increase through this surcharge.
According to the Kiel Economic Institute, the already high impact of the additional gas levy on inflation in Europe’s largest economy should rise to 0.9 percentage points by the end of the year. The German Chemical Industry Association (VCI), a major consumer of gas, estimates the additional annual costs of this levy at more than 3 billion euros and, in a press release, classifies them as a “drop of bitterness” for the industry.
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