Berlin On Monday morning, the commission of experts set up by the federal government was able to agree on an interim solution to cushion the rising gas prices for consumers and companies. “We reached our destination at 6:22 a.m.,” a commission member told Handelsblatt. A result was agreed unanimously. The report describes the first part of a two-step solution to cushion the rise in gas prices for consumers and businesses. A second part will follow later as planned. In a first stage, a refund in the amount of a monthly payment is planned for December, an insider told the Reuters news agency.
The Federal Ministry of Economics only confirmed that the commission had decided on a series of recommendations after 35 hours of deliberations. These would be presented to the federal government in the morning and then presented to the public by the chairmen of the commission. A corresponding press conference is scheduled for 10.30 a.m.
Further details about the planned special payment were not disclosed. SPD parliamentary group leader Rolf Mützenich said about a special payment on ARD: “That would be an important signal”. You have to take a closer look at whether you can integrate this into the tax system and thus implement it in a socially graded manner.
This reimbursement, which is limited to households and businesses, was already provided for in a key issues paper by the Gas Commission, which was available to Reuters. In a second phase, a gas price brake should take effect from March or April, with each customer receiving a state-subsidised quota of 60 to 80 percent of the consumption forecast for September 2022, Reuters reported. In addition, the market price would have to be paid. The quota can be subsidized down to around 12 to 14 cents per kilowatt hour.
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The amount should be stated as a benefit in kind for income tax purposes and taxed above a certain level. This should achieve a social balance, according to the key issues paper. Should there be European rules, the German regulations would be automatically adjusted.
A monthly invoice should go to the state
According to the paper, the suppliers of all customers with a so-called standard load profile – i.e. practically all household and commercial customers – should submit the monthly bill to a government agency. In addition to gas bills, district heating bills should also be settled afterwards. The paper suggested that there should not be an exact billing based on consumption. The costs are not calculated there. At the current gas prices, a monthly statement for December should probably amount to a double-digit billion figure.
The special payment has the advantage that it can provide relief relatively quickly. The disadvantage is that there are no incentives to save. It is considered necessary that households and industry save 20 percent gas compared to previous years in order to avoid a gas shortage. In the past two weeks, however, households have consumed even more.
The quota solution, which according to the paper could follow in the spring, would offer more savings incentives. However, it requires a longer preparation time on the part of the suppliers, so that it could only take effect from spring. The concept described with an 80 percent contingent corresponds to the ideas of Economics Minister Robert Habeck (Greens), which he has already expressed. Here, too, district heating customers are to be treated in a similar way to gas customers.
>> Read here: All developments of the energy crisis in the live blog
The Commission had also said that an extra package had to be put together for the large consumers in the industry. The special payment is initially only intended for households and commercial businesses such as supermarkets or craftsmen.
The gas price brake is intended to be a central rescue tool for the federal government in the energy crisis. On the one hand, it is intended to make the high gas prices more bearable for citizens and businesses, and on the other hand to provide incentives to save energy, which is still necessary.
Proposals beyond the gas price brake
The traffic light coalition has announced a “defense shield” of up to 200 billion euros to support consumers and companies because of rising energy prices. A gas price brake could cap the prices for at least part of consumption in such a way that private households and companies are not overwhelmed.
An “interim report” was announced. Because the tasks of the commission with representatives from associations, trade unions, science and the Bundestag – whose official name is “Expert Commission Gas and Heat” – go beyond the gas price brake. The members are also to assess the extent of price increases due to the loss of Russian natural gas supplies until spring 2024.
In addition to national relief options, they should also examine “options for cushioning price developments at European level, taking into account price formation on world markets”. Further meetings were planned for October 17th and 24th, and the final results of the work should be available by the end of the month.
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