July 29, 2022
Germany plans to impose a levy on all gas consumers beginning Oct. 1 to assist suppliers struggling with rising gas import prices, according to a draft law released.
The levy aims to spread the additional costs of replacing Russian gas among all users while also preventing gas traders from going bankrupt.
The charge will apply to households and industrial consumers with long-term contracts and will be in effect until the end of September 2024, according to the document. Gas importers will have to bear rising costs until the levy takes effect.
The levy benefits struggling importers, particularly Uniper (UN01.DE), Germany’s largest recipient of Russian gas, which received a state bailout last week, and EnBW’s (EBKG.DE) gas division VNG (VNG.UL), Germany’s second-largest.
The levy, according to German Economy Minister Robert Habeck, would range between 1.5 and 5 euro cents per kilowatt hour (Kwh), with the proceeds available to all companies that need to replace Russian gas.
A four-person household could face additional costs of up to 1,000 euros ($1,014) per year as a result.
According to Habeck, the measure was difficult but necessary to stabilize the energy market.
Last month, Germany entered the second of three stages of its supply emergency plan, allowing the government to activate a price adjustment clause, allowing suppliers to pass on price increases to their customers, though it has yet to do so.
A general levy that raises gas prices for everyone, regardless of supplier, is considered more equitable.
Meanwhile, the government has urged citizens and industry to conserve energy now so that gas storage facilities can be fully stocked by November, up from 67.2 percent now.
Source: Reuters
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