Gas Levy Could Triple Household Heating Bills In Germany

By Charles Kennedy of OilPrice.com

Germany plans to introduce a levy for all its gas consumers beginning in October as the government looks to avoid a wave of collapsing gas-importing and gas-trading companies amid record-high natural gas prices, a new bill seen by Reuters showed on Thursday.

Russia is further reducing flows via Nord Stream this week, to just 20% of the pipeline’s capacity, days after restarting the link at 40% capacity after regular maintenance.   

The German government has already intervened to rescue energy group Uniper, Russia’s single largest gas buyer in Germany. Uniper—and many other German gas traders and suppliers—have been reeling from reduced Russian supply and soaring prices of non-Russian gas. Germany and Uniper agreed last week on a $15 billion bailout package, including the German government taking a 30-percent stake in the company and making more liquidity and credit lines available to the group.

Under the plans of the government, all consumers of gas, including households, will have to pay an additional levy, which will go to support Germany’s gas importing companies, which struggle with a lack of Russian gas and sky-high prices of non-Russian alternatives. The details of the bill are set to be announced next month.

Households and industrial consumers are expected to pay the levy through September 2024, according to the draft Reuters has seen.

“One doesn’t know exactly how much (gas) will cost in November, but the bitter news is that it’s definitely a few hundred euros per household,” German Economy Minister Robert Habeck was quoted by Reuters as saying on Thursday.

Marcel Fratzscher, president of DIW, the German Institute for Economic Research, told Düsseldorf’s Rheinischen Post newspaper that German households should prepare for at least tripled costs of heating on gas. The levy should be accompanied by a relief package for lower-income households, otherwise the new charge could lead to a “social catastrophe,” Fratzscher added.