Industry also benefits
Gas price brake: 12 cents and one-off payment in December
10/10/2022, 12:11 p.m
The state wants to relieve consumers and the economy of gas bills. A commission of experts is to work out how this could be achieved. After intensive deliberations, the committee proposes a solution in two stages.
The Gas Price Commission has proposed a two-stage model for reducing gas prices to the federal government:
- In a first step, the state is to take over the down payment of the gas and district heating customers once in December. This one-time assumption of the advance payment corresponds to the amount of the advance payment that was scheduled in September 2022.
- In a second step, a price brake for a certain quota of gas and heat consumption should be introduced for households and small companies from spring 2023 until at least the end of April 2024.
From the beginning of March 2023 until at least the end of April 2024, a gas and heat price brake should take effect. For a basic quantity of gas, this provides for a state-guaranteed gross price, including all price components also set by the state, of 12 cents per kilowatt hour. “That means you get a state subsidy on the down payment almost every month,” explained Veronika Grimm at a press conference. Above this quota, market prices should apply. The basic quota should be 80 percent of consumption. “The amount received does not have to be repaid, even if the actual consumption in the year-end statement differs from the assumed amount,” the report says.
A heat price brake is to come for district heating customers. Similar to the gas price, there should be a guaranteed gross price of 9.5 cents per kilowatt hour of district heating, again for a basic quota of 80 percent of consumption.
The gas price brake is to apply to industry from January 2023. Overall, the relief volume from these proposals amounts to around 96 billion euros, as Commissioner Michael Vassiliadis, who is also Chairman of the Industrial Union for Mining, Chemicals and Energy (IGBCE), explained. It is proposed that industry pay a fixed procurement price of 7 cents per kWh for 70 percent of its consumption in 2021 and the usual market prices for consumption in excess of this.
The measures are intended to relieve the burden, but at the same time provide incentives to save gas and heat. For private households and small and medium-sized companies, the relief during the period up to April 2024 would total around 71 billion euros, for industry 25 billion.
“I believe that the Commission has developed a good and feasible proposal here,” said Commission Chairwoman Veronika Grimm, who is also an economist, when presenting the proposals.
Gas price brake Part of the defense shield
The planned gas price brake is part of the 200 billion euro protective shield that the federal government wants to put up to help private households and companies because of the high energy costs. At the same time, there should be an incentive to save gas, because the federal government wants Germany to reduce its gas consumption by 20 percent.
The federal government now wants to discuss the proposals of the gas price commission quickly. The new tax estimate should also be included in the design of the gas price brake. This is expected for October 27th.
The 21-strong Gas Commission is headed by Grimm, the chairman of the IGBCE trade union, Michael Vassiliadis, and Siegfried Russwurm, the president of the federal association.