Situation “very tense”
Eon announces massive price increases
4/5/2022 4:28 am
Eon is one of the largest energy suppliers in Germany. The approximately 14 million customers will have to pay significantly more for electricity and gas in the future. In wholesale, natural gas is sometimes 20 times more expensive than last year, says the group’s board of directors. He thinks a state price cap is wrong.
The Germany boss of the energy supplier Eon, Filip Thon, prepares consumers for price increases for electricity and gas. “We also have to reflect this unprecedented situation on the market in our pricing, but try to cushion it as much as possible,” Thon told the newspapers of the editorial network Germany.
In some cases, wholesale prices for natural gas would be 20 times higher than in spring 2020. There are eightfold surcharges for electricity. How big the increases will be in concrete terms cannot currently be reliably forecast. However, the manager emphasized: “More than a thousand increases have already been announced in the basic electricity supply and some have already been implemented. There are surcharges of an average of 35 percent.”
The decisive factor for the price development is whether it is possible to buy enough gas at attractive prices in summer to fill the gas storage tanks that are needed for the next heating season. “Currently, the storage facilities are only between 25 and 27 percent full. This is a very low level, so the demand to fill the storage facilities will be correspondingly high. And that is driving prices. The situation is very tense – even without a delivery stop,” explained Thon .
“Drastic consequences” of Russian gas stop
In the event that no more gas from Russia arrives in the EU, there is a risk of “dramatic consequences for the German economy,” he warned. The Eon manager rejected government interventions in the energy markets: “I consider all efforts towards a government price cap to be wrong.” Because there is a risk that the market will collapse. Or companies would have to be subsidized by the state because the suppliers would have to buy the energy more expensively than they are allowed to sell it. But that ultimately makes the energy expensive for taxpayers, who ultimately have to pay for the subsidies.
Instead, Thon advocates reviewing the state aid for private households again: “The planned cancellation of the EEG surcharge on July 1, which electricity customers are currently still paying, is certainly a good step. We have to see if that’s enough There are additional levies and taxes for electricity and gas, and reducing them could provide additional relief.” At the same time, work must be done on energy efficiency both in residential buildings and in companies. Eon is one of the largest energy suppliers in Germany. According to the company, it has over 14 million private, business and industrial customers.