Germany: What you should know about the gas surcharge

The amount of the gas levy to save systemically important gas importers is to be announced this Monday.

Consumers have to reckon with considerable additional costs.

The levy will come in autumn, but many questions are still open:

How high will the gas levy be?

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.

It should be announced on Monday afternoon.

The Ministry of Economics recently assumed a range of 1.5 to 5 cents per kilowatt hour.

All gas consumers, companies and private households, have to pay the surcharge.

The comparison portal Verivox calculated additional costs of between 89 and 298 euros for this range for a single household with an annual consumption of 5000 kilowatt hours.

A typical couple household would be charged between 214 and 714 euros, a family in a single-family house (20,000 kilowatt hours consumption) with 357 to 1190 euros.

This includes VAT.

When will the gas levy reach consumers?

The levy applies from the beginning of October.

According to the Ministry of Economic Affairs, it will not be visible immediately on the invoices, but with a slight delay.

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 appear on invoices for the first time in November/December.

However, the Federal Association of Energy and Water Industries (BDEW) expects that some suppliers will bill their customers for the surcharge from October 1st.

Why is the levy necessary?

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.

Consequence: Importers have suffered major losses, which threatens the continued existence of the company.

That is why the federal government has agreed on a rescue package worth billions with the utility Uniper.

How does the levy work?

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 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.

What applies to fixed contracts?

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 consequence 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 levy 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."