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28 Jul, 2022 16:57

Germans face steep increase in gas bills – media

Berlin is set to introduce a surcharge for all consumers to alleviate the looming energy crisis
Germans face steep increase in gas bills – media

Germans will face significantly higher gas bills in about two months, local media warned on Thursday. The government plans to introduce a special surcharge for all gas consumers on October 1 to cover the extra costs of gas imports ahead of what is shaping up to be an energy crisis, several German outlets said.

The additional charge will be in effect between October 1, 2022 and the end of September 2024, the newspaper Die Zeit reported, citing an internal document drafted by the Economy Ministry. The document is reportedly currently being discussed by various federal ministries and is expected to be published as a ministerial decree by the end of August, the paper added. 

Economy Minister Robert Habeck confirmed that the levy might amount to between 1.5 and 5 euro cents per kilowatt hour. “We can only name a price range,” he told journalists, adding that the surcharge would eventually amount to the increase in “procurement costs” of gas imports designed to replace the missing Russian energy. “In the end, you don't know how high the costs will be in November or December, but the bitter news is: it will definitely be a few hundred euros per household,” he added.

In the worst-case scenario, the price increase for the average German household consuming around 20,000 kWh a year might translate into additional expenditures of up to €1,000 ($1,016) per year, Die Zeit said. About half of German households are heated with gas.

According to the Economy Ministry, the measure is aimed at “maintaining market mechanisms and supply chains for as long as possible, preventing gas traders from going bankrupt and [triggering] domino effects in the energy supply chain.”

The surcharge will allow gas importers to pass on up to 90% of the increased procurement costs to end consumers, the magazine Focus said. The measure will be in addition to the normal price increases that take place on a scheduled basis, it added. 

Habeck admitted that the decision to introduce the surcharge was a “difficult step that involves a lot of stress.” At the same time, he said that “we can't bear all the costs as a state.” 

The news came as a senior editor on the newspaper Die Welt economic and financial desk warned that Germany was heading for a “huge energy crisis,” adding that current energy prices are detached from reality and will prevent energy companies from operating normally in a competitive environment.