Gas price cap instead of gas surcharge? The “traffic light” doubts and argues

The rapid passing on of the costs of replacing Russian natural gas to gas consumers has met with massive resistance in Germany. Now the gas surcharge could give way to a price brake. But a new dispute is already looming.

In the meantime, both have doubts about the gas levy: Finance Minister Christian Lindner (FDP, left) and Economics and Climate Protection Minister Robert Habeck (Greens).

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Actually, it should have come into force next Saturday, October 1st: the German gas surcharge. But a few days before it is uncertain whether she will come – and if she does, she will soon disappear again. For days, more and more leading politicians from all three parties in the traffic light coalition have been raising such serious doubts about the levy that one wonders which government actually decided it. Instead, a gas price cap is now being discussed.

Reasons for the gas surcharge

On Monday, a government spokesman said when asked about both approaches that the federal government was now working on an “overall solution” whose structure would become visible “very quickly”. In terms of content, however, he did not show his cards.

According to current plans, the gas surcharge should be around 2.4 cents per kilowatt hour and be paid by all gas consumers, whether companies or households. Under certain conditions, the gas importers should be compensated from the revenue for 90 percent of the additional costs they incur because they have to replace the Russian gas that has been contractually guaranteed but no longer supplied by purchases on the market at much higher prices. Since they are currently hardly able to pass these additional costs on to their customers – for example municipal utilities – due to contractual regulations, they are losing millions every day. No company can last that long.

German energy legislation provides two options for passing on short-term price increases more quickly: On the one hand, the state can allow companies to pass on the higher costs directly to their respective customers. On the other hand, he can use a gas allocation to distribute the additional costs evenly among all gas consumers. In the summer, the government justified the choice of the second option with solidarity: the first option would have affected gas customers very differently, depending on how much gas their supplier had previously purchased from Russia. This would have led to socially problematic imbalances and distortions of competition, it said.

The gas surcharge was also intended to set price signals: if companies and households were confronted with the increased prices now and not after a long delay when the next contract was adjusted, they would have more incentive to save energy.

Criticism rains down

However, the project immediately met with sharp criticism, initially above all from the opposition. It’s easy to create a mood with the topic, since nobody likes to pay higher prices and the connections are reasonably complex. It also turned out that some companies had also applied for compensation from the levy, which are by no means in need. The leading Green Federal Economics Minister Robert Habeck promised corrections, but the project did not become more popular due to the back and forth.

When Habeck announced the nationalization of the energy company Uniper last Wednesday, he himself pointed out a possible friction: Whether a gas levy is still permissible under financial law after the nationalization of Uniper still has to be checked, he said. Some experts had previously complained that in the case of Uniper it would be tantamount to a tax. Habeck added, however, that the gas levy would be needed as a bridge until the Uniper nationalization was implemented in about three months.

settling movements

At that time, the liberal Finance Minister Christian Lindner contradicted him with the statement that the legal review had already taken place and that there were no concerns. At the weekend, Lindner moved away from the levy, albeit for different reasons: “The gas levy is less of a legal question and more and more of an economic question,” he explained to the “Bild am Sonntag”. “We have a gas surcharge that increases the price. But we need a gas price brake that lowers the price.” He later added in the ARD talk show “Anne Will” added that he had an idea for financing such a brake, but wanted to discuss it with the coalition partners first.

So far, Chancellor Olaf Scholz (SPD) has not made a clear statement. It is now about “how we can reduce the far too high prices, both those for electricity and those for gas,” he said on the sidelines of his visit to the Gulf States. He referred to a recently set up expert commission, which examines different models. The SPD co-chair Saskia Esken was all the more explicit in the ARD program “Report from Berlin”: The gas levy seems “quite nonsensical” in view of the high prices and the need for a gas price cap.

On Monday, Omid Nouripour, one of the two federal leaders of the Greens, said the broadcaster RTL/NTV, although he assumes that the gas surcharge will initially come into force on October 1st. But it should be overturned “as soon as possible”. He also spoke out in favor of a gas price cap, at least for a minimum consumption.

Who pays the bill?

Against this background, it is unlikely that the gas levy will last for long. However, doing without them does not yet solve the problem that gas importers have to contend with, at least temporarily, with an enormous gap between high purchase prices and low sales prices. It is still unclear what a gas price brake or cap would look like. But every model known to date requires some form of government subsidies in order to temporarily lower the selling price for at least one basic requirement without risking the collapse of energy suppliers.

This raises the question of funding. So far, Lindner is sticking to the regular observance of the debt brake next year. This calls for a more or less balanced state budget and is currently suspended using an exception clause. Esken, on the other hand, explained that from her point of view the conditions for a renewed suspension had long been in place. You could also go “the path of a special fund”.

To put it plainly, special assets such as the one created for the Bundeswehr this year are not assets, but debts to which the debt brake does not apply. Esken also believes that people with very high net worth and those with very high incomes should contribute.

Ricarda Lang, the other co-chair of the Greens, also spoke out in favor of a gas price cap for basic needs on Monday. Funding should come from the budget. She is open to different ways, if necessary, the debt brake must be suspended again.

In the end, however, citizens and companies will have to foot the bill for the expensive gas, be it in the form of a gas levy or at some point through their taxes – only the distribution will change.

You can contact the Berlin business correspondent René Höltschi Twitter follow.


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