The German state must pay the December monthly gas bill for all households and small and medium-sized businesses, according to a two-stage progressive cap on energy prices recommended by a government-appointed expert group on Monday .
Under the program, the one-time full refund in December would be followed next spring by a more differentiated subsidy program designed to cap bills while incentivizing people to save energy.
From March 2023 to the end of April 2024, private households would pay €0.12 (£0.11) per kilowatt hour for the first 80% of last year’s gas consumption. Industry, meanwhile, would pay from January 1, 2023 to the end of April 2024 €0.07 per kilowatt hour for the first 70% of last year’s usage.
Expert group co-chair Dr Veronika Grimm said subsidized prices would provide a “new normal” with which businesses and private households could plan, without artificially reverting to the low prices that were common before the war. Russia in Ukraine does not upset Germany’s energy policy.
“It won’t be the case that the price goes back down to 7 cents in the future,” Grimm said. “We won’t get Russian gas for a long time.”
While the exact costs were difficult to predict, the proposed two-stage program could cost around 90 billion euros, said Siegfried Russwurm, panel member and president of the Federation of German Industries.
It is likely that the coalition government of German Chancellor Olaf Scholz will adopt the measures recommended by the expert commission, made up of 20 members from industry, trade unions and academia.
In late September, Scholz, a social democrat, announced a 200 billion euro “defensive shield” to protect consumers from rising energy prices, but did not explain in more detail how it would work in practice. .
The gas price cap represented a reversal of a previous regime which meant consumers would have been hit from October with an additional gas tax intended to compensate energy suppliers for rising fuel costs. ‘import.
While the price cap is likely to prove less politically toxic than the gas tax, there are concerns that it will deter consumers from saving gas on their own. Despite government rallying cries, gas consumption in the first week of October increased year-on-year.
Scholz’s €200bn support package has also proved controversial among other EU member states, with Poland accusing Germany of ‘destroying’ the EU’s internal market by subsidizing its own companies while opposing a pan-European cap on gas prices.