German Gas Bills Increase

Faced with the energy crisis, Germany is imposing a new tax. This leads to higher gas bills for households.

Gas bills of German households are increasing. The purpose of this increase is to limit the losses caused by the replacement of Russian supplies. Trading Hub Europe reports that gas bills for German households will increase by 2.419 euro cents per kWh.

Increase in gas bills, an emergency measure

The government adopts a new tax to support the country’s energy sector. The latter has been under great pressure since Russia invaded Ukraine in February. The faster-than-expected reduction in Russian supply did not allow the Bundestag to stall sufficiently to deploy its alternative measures.

The increase in coal prices has put a heavy strain on the liquidity of energy operators in Germany. The losses generated are a serious threat to the economy and raise the spectre of a severe recession as early as next winter. LNG facilities and contracts under negotiation cannot respond soon enough to the current challenges.

The tax will be effective as of October 1 and will be maintained, normally, until April 2024. This increase in gas bills in Germany represents, according to Verivox, an increase of 13%. The average gas bill in Germany, based on 20,000 kWh, is €3,568. Thus, an increase of 13% represents 480 €.

Protecting the German energy industry

Uniper is expected to be one of the main beneficiaries of this increase in gas bills. In July, the German government played a major role in safeguarding the country’s main gas importer. A rescue plan involving the purchase of 30% of the company’s shares and a public loan of several billion euros in convertible bonds has already been implemented.

Robert Habeck, German Minister of Economics, explains:

“The alternative would have been the collapse of the German energy market, and with it large parts of the European energy market. […] The German energy model, dependent on Russia, has failed and will not return. […] To do this, we sometimes have to take bitter medicine.”

The industry must also deal with this new tax. Hans Juergen Kerkhoff, president of the German Steel Federation, believes that the gas surcharge will increase cost pressure.

Soaring energy prices had already resulted in a cost of around 7 billion euros. This new tax will lead to a further increase in gas bills. This is estimated at 500 million euros.

In Germany, inflation has reached 8.5%. Economists expect it to accelerate further. For example, the Federation of German Industries is calling on the Chancellor to take measures to support businesses.

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