Zoom Image

Coalition partners Habeck, Scholz, Lindner: Dispute over possibilities of relief

Photo: Michael Sohn / dpa

One year after the German government's measures to ease the burden on customers, which became known as "double whammy", the energy industry has warned of new price jumps. It is true that prices have stabilized in the meantime and that is reaching customers, said Kerstin Andreae, Chairwoman of the Executive Board of the German Association of Energy and Water Industries (BDEW). However, this should not obscure the fact that there are increased risks due to geopolitical developments.

"A premature withdrawal of the relief could lead to consumers being hit by new price jumps in the middle of the heating season," says Andreae.

Experts fear risks above all for gas prices. For example, wholesale prices in the coming winter will depend on the supply of LNG on the world market, the availability of pipeline gas and temperature development, but also on savings by industry and households, said Enervis gas market expert Sebastian Gulbis. In a particularly cold winter, prices could skyrocket again.

Last year, among other things, the German government temporarily reduced the VAT rate on gas from 19 to 7 percent in order to push down the price of gas. Federal Finance Minister Christian Lindner (FDP) now wants to let this special regulation expire three months earlier than planned at the turn of the year – to the displeasure of some coalition colleagues. In the course of the consultations on the 2024 federal budget, there could still be changes.

The Ministry of Finance justified the step by saying that the crisis-related price peaks on the gas markets had now subsided. In addition, "room for manoeuvre for public budgets" should be created.

The coalition has been debating for weeks how companies should be relieved in view of the high energy prices by international standards. There are discussions about an industrial electricity price for particularly energy-intensive companies or a reduction in electricity tax – both of which would cost billions.

On September 29, 2022, German Chancellor Olaf Scholz (SPD) announced a "defensive shield" to dampen the sharp rise in energy prices – with a volume of up to 200 billion euros. On the one hand, it was about state support for the energy supply, and on the other hand, it was about energy price brakes. "You can say it's a double whammy here," Scholz said at the time. He recalled his statement on state aid in the Corona crisis – that it was a matter of coming out of the crisis with "oomph".

The BDEW is now calling for a quick decision by the federal government. Binding statements are needed very quickly. If the price brakes were extended, companies would need time to convert their IT systems. "Consumers also need clarity as soon as possible," says Andreae. "It is important to continue to protect customers from high prices in the coming heating season with all its imponderables through fast, clear and transparent action."