IFO Institute estimate
Gas price brake probably much cheaper than expected
08/09/2023 11:01 am
Russia’s war of aggression against Ukraine triggered an energy crisis in the rest of Europe last winter. The federal government wants to absorb the increased costs with a gas price brake. Estimates show that the costs for this could be significantly lower. But there is no all-clear.
The gas price brake is much cheaper than expected for German taxpayers. The Munich IFO Institute now expects costs of 13.1 billion euros, as it announced. That is a third of the originally planned sum of 40.3 billion.
“The reason is that gas prices have fallen sharply since then,” said IFO expert Max Lay. “In 2024 we expect zero expenditure, because many newly concluded gas contracts from normal consumers already fall below the price limit of 12 cents per kilowatt hour.” Industrial customers have not had to pay more than the 7 cents set by the price brake for a few months now.
However, Lay warned: “Even if the energy markets have calmed down, the estimate of the costs for the state is still associated with a high degree of uncertainty, since it is based on a forecast of the market prices for the respective consumption groups.” According to the expert, almost 12.4 billion of the 13.1 billion euros are attributable to households and small and medium-sized enterprises. Industry accounts for almost 700 million. Gas-fired power plants and larger residential units would not be relieved.
Most recently, Federal Economics Minister Robert Habeck suggested using the money from the Economic Stabilization Fund to finance a state-subsidized industrial electricity price. The special pot has a volume of 200 billion euros and was primarily intended for the electricity and gas price brake. Due to falling prices, however, the financing of both brakes could become significantly cheaper. The FDP rejects both the industrial electricity price and an opening of the fund.