Germany to impose gas tax on consumers to support struggling importers

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BERLIN — Germany is set to impose a tax on all gas consumers from October 1 to help suppliers struggling with soaring gas import prices, a bill announced on Thursday. .

The tax aims to spread the additional costs of replacing Russian gas among all users and prevent the insolvency of gas traders.

Households and industrial consumers with long-term contracts will be affected by the tax, which will be valid until the end of September 2024, the document says. Gas importers will have to bear the rising costs themselves until the tax comes into force.

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The tax is a boon for struggling importers, including Uniper, Germany’s largest recipient of Russian gas, which received a state bailout last week, and EnBW’s second-largest gas division VNG. .

German Economy Minister Robert Habeck said the tax would amount to between 1.5 euro cents and 5 euro cents per kilowatt hour (Kwh), with the product available to all businesses that need to replace Russian gas.

This means that a household of four could face additional costs of up to 1,000 euros ($1,014) per year.

Habeck said the measure was difficult but important to stabilize the energy market.

“It is not known exactly how much (gas) will cost in November, but the sad news is that it is certainly a few hundred euros per household,” he said.

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More details on the levy will be announced in August, according to the document.

Local utility association VKU welcomed the measure, adding that the tax should be raised or extended if high prices persist.

A precondition for the triggering of the mechanism by the government is a significant disruption of gas flows to Germany. Gazprom’s Russian cut is running through the Nord Stream 1 gas pipeline at just 20% capacity this week.

Germany last month moved to the second of three stages of its contingency supply plan, allowing the government to trigger a price adjustment clause so suppliers can pass on price increases to their customers, although he has not yet done so.

A general tax that would increase gasoline prices for everyone, regardless of their supplier, is however considered fairer.

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Meanwhile, the government has called on citizens and industry to save energy now so it can fill gas storage facilities before winter – aiming for 95% capacity by November, up from 67, 2% currently.

The companies are weighing their options, while Berlin has already announced that it will turn off the lights of 200 public buildings and monuments at night.

As Germany was going through what Habeck called its « greatest energy crisis, » Gazprom’s inability to deliver reserved gas was causing companies to source the fuel at significantly higher market prices, he said. declared.

“That (price) difference is the levy. It is then passed on to the end consumer, because otherwise businesses would be permanently losing millions a week,” he added.

Marcel Fratzscher, president of the economic institute DIW, said it was « right and necessary » to pass the costs on to all consumers and that Germans should be prepared for at least a tripling of gas heating bills, but that there should be relief measures to support low-income people. households, according to the Rheinische Post.

Habeck said people falling into poverty due to rising energy prices must be protected and relief measures would be targeted.

($1 = 0.9862 euros) (Reporting by Riham Alkousaa, Christian Kraemer and Markus Wacket; Additional reporting by Christoph Steitz; Editing by Jason Neely, Kirsten Donovan and Jan Harvey)