15.08.2022, Berlin: Robert Habeck (Bündnis 90/Die Grünen), Vizekanzler und Bundesminister fu·r Wirtschaft und Klimaschutz, informiert zur Gasumlage. Foto: Britta Pedersen/dpa +++ dpa-Bildfunk +++

It sounds like little. But the consequences of the announcement, which the gas network subsidiary Trading Hub Europe published on Monday at twelve o’clock sharp, will be felt by gas customers in Germany on their accounts. Because of the so-called gas levy, the price of gas will increase by 2.4 cents per kilowatt hour from October 1 – in addition to the gas prices, which have already risen sharply. An average household with four people will probably incur additional costs of around 460 euros net – per year.

Economics Minister Robert Habeck (Greens) said it was a “bitter medicine”. The surcharge will help to end the old business model in Germany, which is based on cheap gas from Russia. “This model failed and will not come back,” says the minister and announced further relief.

Habeck defends the step, which will affect almost every second German household, as the “fairest possible” option: “The alternative is not no levy, the alternative would have been the collapse of the German energy market.”

In fact, the import companies that procured the gas from Russian companies have run into financial difficulties in recent months. Since Russia no longer fulfills its supply contracts, but the importers themselves have obligations to major customers and municipal utilities, they have to get the failed gas supplies on the spot market – at significantly higher prices. In principle, the importers, especially if they had done business with Russia, had to buy the gas more expensively than they sold it.

With the gas surcharge, which applies until April 1, 2024, consumers are now supposed to support companies. How the Trading Hub Europe, a joint venture of the gas transmission system operators, came to 2.4 cents per kilowatt hour remains unclear on Monday. The Ministry of Economic Affairs does not publish any studies or exact figures.

The levy is based on the figures from the companies that have been reported in the past few days, says Habeck and adds: “It has been strictly checked by the Federal Network Agency.”

The federal government leaves many more questions unanswered. For example, only twelve companies have the right to pass on the surcharge. The Ministry of Economics does not say in its regulation which companies are involved.

RWE and Shell, which have recently made high profits, have already announced that they will not pass the levy on to their customers for the time being. It remains unclear who is still entitled to the levy in addition to Uniper – the largest German gas importer, which was in financial difficulties. It is also just as uncertain how fixed contracts, which actually do not allow any allocations or increases, will be dealt with. According to the Ministry of Economic Affairs, the ministry is still examining this question.

For a long time, the federal government, especially in the person of Chancellor Olaf Scholz (SPD) and Economics Minister Habeck, had publicly stated that they were prepared for the winter. But only since the Russian state-owned company Gazprom violated the long-term gas contracts – with the crude turbine story – did the Economics Ministry wake up.

Experts criticize that there have been no savings incentives or savings rules for too long. The confusion surrounding VAT also shows that the ministry is working under great pressure.

With VAT, an average household has to pay almost 100 euros in additional taxes on top of the levy. Although the traffic light does not want that, Finance Minister Christian Lindner (FDP) had to make representations in Brussels. The outcome is uncertain.

For the Federal Association of Energy and Water Industries (BDEW), this cosmetic intervention does not go far enough either way. There they are calling for a temporary reduction in VAT on gas and electricity prices from 19 percent to the reduced rate of seven percent.

From January 2023, this is to be changed for at least two years. “This applies to the electricity price and in particular to the gas price, since in addition to the enormously increased procurement costs, further sharply rising prices are to be expected with the new gas procurement and gas storage levy,” said BDEW Chair Kerstin Andreae.

In fact, in addition to gas prices, the gas levy could also increase again. Every month, the companies should calculate their additional costs, and every three months they are recalculated based on this data.

“Should Russia deliver even less gas and world market prices continue to rise, I can well imagine that the surcharge could increase significantly,” says energy market expert Andreas Schröder. He believes that more than five cents per kilowatt hour is possible.

For an average household with four people, that would mean additional costs of around 1,000 euros for the levy alone. “We are currently experiencing a supplier market in which gas producers can practically choose their customers and the price.”

Schröder predicts that the market will only calm down again in the mid-1920s. Then relevant LNG delivery quantities from the USA will be available for the world market.