German households are facing additional annual costs of 500 euro $510 to pay for natural gas as the government spreads the burden of Russia's squeeze on energy flows to Europe.
In a statement released Monday, Trading Hub Europe said that consumers will have to pay extra 2.419 euro cents per kilowatt hour for natural gas from October. The temporary levy will be softened by subsidies for some households.
Economy Minister Robert Habeck said in a statement that the levy is a result of Putin's illegal war of aggression against Ukraine and the artificial energy shortage caused by Russia. It is necessary to maintain the heat and energy supply in private households and the economy. The security of supply would be jeopardized if this happened. The levy comes as Europe shifts its focus to curbing consumption in the face of a worsening energy crisis. German power prices climbed to a new record level amid mounting concerns that the region may struggle to generate enough electricity this winter.
Utilities will be able to pass along costs for offsetting missing Russian supplies from the start of the fourth quarter. After Russia's invasion of Ukraine, Germany was trying to make consumers pay higher energy costs. But officials fear Moscow could cut off gas flows completely, forcing them to act.
Some consumers will be eligible for a subsidy on heating costs, said Habeck. The German Finance Minister Christian Lindner said he will look at ways of exempting the tax from sales tax to help ease the burden. Habeck is scheduled to make a statement on the measure at 3: 30 p.m. in Berlin.
The levy was put into effect on August 9 to help energy utilities that have had to buy more expensive gas in the spot market. Their costs have gone up after Moscow has cut flows through the key Nord Stream pipeline to Europe.
Uniper, Germany's largest Russian gas buyer, is counting on the levy to shore up its finances after the company signed a bailout from the government. The government is asking energy companies to raise prices to protect consumers from having a domino effect on the sector.
Uniper to bear EU 6.2 B of losses before passing on higher costs
Gas importers affected by the reduction in volumes are entitled to financial compensation for part of the additional costs of replacement procurement, provided that the gas contracts are completed before May 1, Trading Hub Europe said.
The ability of Europe to get through the winter will be affected by reductions in gas consumption. Incentives to reduce demand are expected to be at the centre of the region's agenda.
Germany s gas storage facilities are 76% full, according to data from the Federal Network Agency, known as BNetzA.
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