Germany plans tax on gas bills for all consumers

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By Markus Wacket

BERLIN (Reuters) – The German government is aiming to impose a tax on all gas consumers to help suppliers struggling with rapidly rising import prices, a proposal seen by Reuters said on Friday.

The legislation is expected to be passed by parliament on July 8, according to industry and government sources.

A spokesman for the economy ministry declined to comment on the proposal, but said the ministry regularly checks the existing instruments and whether they can be supplemented.

Germany is working to put an emergency mechanism in place before July 11, when 10 days of scheduled maintenance on the Nord Stream 1 gas pipeline from Russia will completely stop flows.

Experts warn that the outage could be prolonged, worsening gas shortages and driving up prices further.

The additional costs of replacing gas from Russia will be shared between all gas customers according to a “transparent and non-discriminatory” procedure via Trading Hub Europe, an organization of gas network operators.

The tax will make gas more expensive for everyone instead of the burden only falling on certain households depending on their gas supplier.

If parliament approves the plan, the government could introduce the levy instead of a general price adjustment clause that would allow suppliers themselves to pass on price increases to customers.

Experts consider the price adjustment clause unfair and legally questionable. The clause stipulates that only reasonable costs can be passed on, which allows for many interpretations, energy lawyer Peter Rosin told Reuters.

Rosin said it was doubtful that contracts promising consumers fixed prices could be revoked.

The new levy assessment system will be based on the model of the EEG surcharge on electricity bills which has been used to support renewable energy.

The levy proposal would still allow the federal government to trigger the general price adjustment clause in the event of a “significant disruption” to gas imports.

Dwindling Russian gas supplies are forcing utilities across Europe to buy gas at high prices.

On Thursday, Germany’s Uniper said it was in talks over a possible government bailout after it withdrew its 2022 outlook due to gas supply restrictions imposed by Russia’s Gazprom.

Industry experts estimate that gas importers need around one billion euros ($1.04 billion) a week to cover the additional costs of rising prices, an amount the proposed tax could fund .

German lobby Zukunft Gas welcomed the proposal, saying the additional costs will have to be borne jointly by all consumers.

“We are facing a financial crisis in the gas trade that needs to be resolved urgently… Without rules on price adjustments, bankruptcies threaten,” said Timm Kehler, managing director of Zukunft Gas.

($1 = 0.9610 euros)

(Reporting by Markus Wacket, Tom Kaeckenhof, Vera Eckert, Writing by Miranda Murray and Riham Alkousaa, Editing by Rachel More, Maria Sheahan and David Evans)

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