According to the joint venture of the gas network operator subsidiary Trading Hub Europe (THE), the gas surcharge for all consumers will be 2.419 cents per kilowatt hour. For an average household of four, this results in an additional burden of around 480 euros per year without VAT. According to calculations by the comparison portal Check24, the additional costs including VAT are 576 euros.

The surcharge is limited until April 1, 2024 and can be updated every three months based on the actual cost level. The Federal Network Agency accompanies the implementation of the gas levy as an independent body.

Economics Minister Robert Habeck (Greens) described the levy in a statement as a “consequence of Putin’s illegal war of aggression against Ukraine and the artificial energy shortage caused by Russia” and at the same time announced further relief for citizens.

The surcharge is “by no means an easy step, but it is necessary to maintain the heat and energy supply in private households and the economy”. That is why the federal government has agreed on first steps such as an expansion of the housing benefit with a heating cost subsidy. However, Habeck believes that further targeted relief is necessary.

In addition, it was “completely clear to the federal government that the state should ultimately not generate any higher VAT revenue from the levy”. A way will be found to ensure that there is no additional burden.

“If the levy is due on October 1st of this year, further relief will be available for the citizens of this country,” said deputy government spokeswoman Christiane Hoffmann on Monday. The coalition is discussing proposals for this. The government sees that people are facing significant additional burdens.

Federal Finance Minister Christian Lindner (FDP) announced on Sunday that he had asked the EU Commission for approval not to levy VAT on the state levy. Lindner said on ZDF that he was trying “to the best of his ability” to avert a VAT levy.

Because of the gas levy, the Association of Housing and Real Estate Companies has called for support for financially heavily burdened housing companies and tenant households. “The gas surcharge increases the financial burden both for socially oriented housing companies and for tenant households,” said the President of the GdW Association, Axel Gedaschko, on Monday in Berlin.

The levy comes on top of the already rising gas prices. First of all, the housing companies are directly affected. “Because they already have to pre-finance the sharply rising costs through significantly higher payments to the suppliers.”

Some socially oriented housing companies are already getting into acute financial difficulties because of the high advance payments. “The first step must therefore be guarantee programs to secure the liquidity of housing companies that are otherwise at risk of insolvency.”

At the same time, the citizens should be relieved. “The housing benefit reform announced by the Chancellor is an important part of this.”

The surcharge is intended to benefit gas suppliers who have to buy a replacement for the missing, cheaper gas volumes from Russia at high prices. The exact amount of the levy is calculated by the so-called market area manager Trading Hub Europe, a joint venture of the gas transmission system operators in Germany.

They are currently not allowed to pass on the additional costs of the gas suppliers, the surcharge should compensate for 90 percent of these costs from October. This is intended to prevent company bankruptcies and ultimately delivery failures.

The levy will apply from the beginning of October – but it will not be visible immediately on the invoices, but with a little delay, according to the Ministry of Economic Affairs.

For reasons of consumer protection, there are notice periods in the Energy Industry Act of four to six weeks that must be observed. Therefore, the surcharge will probably be shown on the invoices for the first time in November/December with a slight delay.

Jörg Kämer, chief economist at Commerzbank, estimates that the gas levy could increase inflation including VAT by almost one percentage point. “Together with the elimination of the nine-euro ticket and the fuel discount, this could cause the inflation rate to rise to well over nine percent in October and November. This is a massive loss of purchasing power for consumers.”

In addition to the uncertainty caused by Putin’s war of nerves over gas, this is an important argument why the German economy should shrink in the winter half-year, i.e. slide into a recession. “The German economy is facing difficult times, even if the companies are quite resilient because they have significantly increased their equity ratio over the past 20 years,” said Kämer.

Jens Südekum, economist at the Heinrich Heine University in Düsseldorf, estimates that there is unfortunately no way around the gas surcharge, even at this level. “But it should be combined with a relief package for people with small and middle incomes, because the rising energy costs are getting to their substance. Politicians have to make up for this here.”

Gas importers have delivery obligations to their customers, especially to municipal utilities. The importers can only meet these delivery obligations by replacing the lost quantities from Russia by purchasing significantly more expensive quantities on the short-term market.

So far, these additional costs cannot be passed on. The result: significant losses have been incurred by importers, and the continued existence of the company can be jeopardized. If large gas buyers went bankrupt because of this, Germany’s entire energy supply would be at risk. That is why the federal government has agreed on a rescue package worth billions with the utility Uniper.

At the same time, the federal government also decided to apply the surcharge to all gas customers. The alternative would have been to finance the financial compensation for the importers through the state budget. However, this would be associated with “considerable burdens” on the budget, according to the regulation. Politically, the federal government is also sending a price signal: Saving on gas is also financially worthwhile.

The core are compensation payments to the gas importers. They should be sufficient to prevent bankruptcies, it is said. The levy is intended to prevent “further massive price increases due to the loss of gas importers that are important for the market due to insolvency”. The financial compensation for affected gas importers is limited in time to the fulfillment of contractual delivery obligations from October 1, 2022 to April 1, 2024. According to the ministry, the affected gas importers will bear all costs for the replacement procurement alone until October. After that, they bear 10 percent of the costs permanently themselves.

There is a complex formula for calculating the allocation, which, among other things, takes into account the difference between the contractually agreed and the current purchase price. The amount of the additional costs must be certified by auditors. According to the ministry, the compensation will be made by the gas suppliers, who will usually pass on the costs to their customers.

One problem is how to deal with customers with fixed contracts. So far, the ministry has only said that this will be checked. In a letter to Habeck, the BDEW and the association of municipal companies warned that a price adjustment for customers with contracts without the possibility of adjustment could not be enforced until October 1st. This affects an average of around 25 percent of household customers and small businesses, and even significantly more for some suppliers.

“The result would be that the companies would have to pay the levy to the market area manager, but would not be reimbursed immediately by the end consumers,” the letter says. In the case of fixed price contracts and in the electricity and district heating supply generated from gas, there is a risk of a total failure if the surcharge cannot be contractually passed on.

“This creates significant liquidity problems for the energy suppliers, which can also lead to insolvency due to the already tense financial situation.”

But consumer advocates give customers little hope. Consumers who have a price guarantee in their contracts and hope to be spared are wrong, warns Udo Sieverding, energy expert at the North Rhine-Westphalia consumer advice center. Because this guarantee does not protect against government levies or taxes. “Everyone has to pay,” says the consumer advocate.

As of now, VAT is due on the state gas levy – so the state also earns. Finance Minister Christian Lindner (FDP) and Habeck want to prevent this, but it is not easy legally. According to the Ministry of Finance, such exceptions are not provided for in European law.

Lindner had promised that he would exhaust all legal and political options to avert an additional burden. Saarland Prime Minister Anke Rehlinger proposed passing on VAT revenue from the gas levy to poorer households.

In addition to the procurement levy, there will also be a gas storage levy in the fall. This is intended to reimburse Trading Hub Europe for the costs it incurs to ensure security of supply, i.e. for the purchase of gas. However, the Ministry of Economic Affairs does not assume that this levy will reach a “relevant size”.

Chancellor Olaf Scholz (SPD) confirmed on Thursday that the government would not leave the citizens alone. At the beginning of next year there should be a significant increase in housing benefit, and a permanent heating cost subsidy for low-income households is also planned.