Business representatives and social organizations called for more relief for low-income households and energy-intensive companies on Monday after the amount of the gas levy was announced.
As reported by Trading Hub Europe, a joint venture of the gas transmission system operators in Germany, household customers and companies will receive 2.419 cents per kilowatt hour more from October 1st. With an annual consumption of 15,000 to 20,000 kilowatt hours per year, this means additional costs of 431 to 575 euros for an average household. For singles with a consumption of 5000 kilowatt hours per year, it is around 144 euros on top (including VAT).
The gas surcharge also represents an additional burden for companies. The German Economic Institute (IW) expects additional costs for industry of 5.7 billion euros. Energy-intensive basic industries are hardest hit because a lot of gas is needed there, also as a raw material, according to an initial analysis on Monday.
“In times of exorbitantly rising energy costs, the surcharge represents a high additional burden that not only affects the energy-intensive sectors, but the entire industry,” warned Holger Loesch, Deputy General Manager of the Federation of German Industries (BDI).
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Business representatives called for the levy to be extended beyond 2024, as the costs would overwhelm many companies. It is now important to support the companies that are particularly in need of protection and to maintain the competitiveness of the industry in general.
“The gas price, which continues to rise as a result of the levy, hits those companies particularly hard who cannot pass on the rising costs, for example because they are bound by fixed supply contracts or have to comply with a given world market price,” warned Christian Seyfert, Managing Director of the Association of Industrialists Energy and power industry (VIK), on Monday.
According to its own statements, the VIK represents around 300 companies from industry and commerce, which account for around 80 percent of industrial energy consumption. Without relief for the particularly affected sectors, these developments would massively endanger the local business and industrial location, according to Seyfert.
euros additional costs
are due to the gas levy for an average household with a consumption of 20,000 kilowatt hours per year.
Economists keep pointing out that the gas surcharge will also drive up inflation. Jörg Krämer, chief economist at Commerzbank, estimates that inflation, including value-added tax, will increase by almost one percentage point due to higher gas prices alone. “Together with the elimination of the nine-euro ticket and the tank discount, this could cause the inflation rate to rise to well over nine percent in October and November,” says Krämer. “This is a massive loss of purchasing power for consumers.”
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The economist warned that the German economy is facing difficult times – even if companies are quite resilient because they have significantly increased their equity ratio over the past 20 years.
The Social Association Germany (SoVD) called for further state aid for low-income households. “The federal government must not leave people with a small budget alone now,” said SoVD President Adolf Bauer to the newspapers of the Funke media group. The federal government must now effectively and purposefully help pensioners, people on basic security and low earners.
Poverty-proof standard rates for basic security and the introduction of basic child security are needed. “Moreover, a housing benefit reform is necessary, and the millions of retired people who have been completely ignored up to now quickly need a 300-euro energy allowance,” said Bauer.
“This is a massive loss of purchasing power for consumers.” Jörg Krämer, chief economist at Commerzbank
Gas prices have already risen massively due to the Russian war of aggression. A megawatt hour of natural gas currently costs 206 euros on the Dutch TTF exchange for September. For comparison: A year ago, the prices were just under 25 euros. Because Russia is supplying less and less gas to Europe, there is a shortage on the market – this is driving up the prices, which have already been high after the pandemic, since the outbreak of the Ukraine war.
“The gas levy increases the financial burden both for the socially oriented housing companies and for tenant households,” said Axel Gedaschko, President of the Central Association of the Housing Industry GdW, after the amount of the levy was announced. The levy adds an additional cost increase of currently 13.4 percent.
>> Also read here: Shell waives money from planned gas surcharge
First of all, the housing companies are directly affected, because they have to pre-finance the sharply rising costs through significantly higher payments to the suppliers.
“The housing companies are thus in a difficult ‘sandwich position’ between energy suppliers and households,” says Gedaschko. The first step must therefore be guarantee programs to secure the liquidity of housing companies, which are otherwise at risk of insolvency, he demanded.
The German Economic Institute (IW) estimates the annual additional costs for industry as high.
The federal government promised more relief for consumers on Monday. “When the levy is due on October 1 of this year, further relief will also be available for the citizens of this country,” said deputy spokeswoman Christiane Hoffmann. Federal Minister of Economics Robert Habeck (Greens) assured that the levy must and will be accompanied by another relief package.
“Energy prices have risen enormously overall as a result of the Russian war of aggression. Especially for those who don’t have much, this is a heavy burden that is either difficult or impossible to bear.” “But I think that further targeted relief is necessary,” said Habeck.
Chancellor Olaf Scholz also promised another relief package. “We don’t leave anyone alone with the higher costs,” said the SPD politician on Twitter on Monday. At the same time, Scholz admitted: “It’s getting more expensive – there’s no getting around it. Energy prices continue to rise.”
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