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Gas flames on a gas stove: prices could rise

Photo: Malte Christians / dpa

The price brake for gas and heat was intended to mitigate the price jump as a result of the Russian war of aggression on Ukraine. A reduced VAT rate has applied to gas deliveries since October 2022. But this state support will expire at the end of March. According to experts, consumers will therefore have to prepare for higher gas prices from April.

“The full VAT rate will suddenly increase the price of gas by eleven percent,” said Thorsten Storck, energy expert at the comparison portal Verivox. Steffen Suttner, Managing Director of Energy at the comparison portal Check24, also expects that the increase in VAT from seven to 19 percent will significantly increase energy costs for consumers from April.

According to Verivox, a family with a gas consumption of 20,000 kilowatt hours has average additional costs of around 220 euros per year. According to calculations by the Check24 portal, a family with a consumption of 20,000 kilowatt hours will incur additional costs of 173 euros - in the current year 2024. A single person with a consumption of 5,000 kilowatt hours would have to pay 52 euros more.

Consumers should read meter readings

Florian Munder, energy expert at the Federal Association of Consumer Organizations, said that the current new contract prices for gas customers are far below the high prices of the energy price crisis. Consumers should compare prices and consider switching to a cheaper provider. “It’s important to look closely at whether the provider is reputable.”

The Finanztip advice page recommends consumers to read the gas meter on March 31st or April 1st and report the meter reading to the gas supplier. This ensures that the correct quantity is calculated at the old, tax-deferred price. Without the meter reading, the supplier can estimate and you may end up paying more than was actually used.

The expiry of the reduced VAT rate will be reflected in the final price, said a spokesman for the Association of Municipal Companies (VKU), which represents municipal utilities, among others. The VAT makes the state part of the gas price more expensive. However, other factors had a dampening effect on prices, for example falling purchase prices. The extent to which suppliers could compensate for the higher tax rate depends on the company's procurement strategy. VAT is a component of the gas price, alongside, for example, the price for procurement and distribution.

The reduction in VAT on natural gas deliveries and district heating was limited from the outset until March 31, 2024. A growth law passed by the Bundestag stipulated that the VAT reduction should expire at the end of February because the “crisis-related price peaks” on the gas markets had now subsided , as it was said in explanation. After a mediation process between the Bundestag and Bundesrat on the law, it was decided that the VAT reduction would not expire until the end of March.

According to the Federal Association of the Energy and Water Industry, a household in an average single-family home with an annual consumption of 20,000 kilowatt hours of gas saved around 550 euros due to the price reduction. However, thanks to the recent fall in energy prices, it is justifiable to now allow this relief instrument to expire.

Overall, the situation on the energy markets has eased significantly, said a spokeswoman for the Federal Ministry of Economics. »Energy costs, both in terms of electricity and gas, have fallen back to significantly lower levels than at peak times during the first year of Russia's war of aggression against Ukraine. The prices for private households that concluded a new electricity or gas contract in the second half of 2023 are below those in the second half of 2021.

However, the level of wholesale prices for natural gas and electricity is still partly above the long-term level. Wholesale prices have fallen slightly in recent weeks. Companies and private consumers would continue to have to adapt to fluctuating prices.

mmq/dpa