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Germany Plans Gas Tax on Consumers to ‘Help Companies Replace Dwindling Russian Supplies’
Households that use gas for heating can expect bills to rise by several hundred euros after a levy is introduced in October to help companies replace dwindling Russian gas supplies, German Economy Minister Robert Habeck said on Thursday.
“We expect it [the levy] to be between 1.5 and 5 cents per kilowatt hour,” Habeck said. He said annual additional costs of around €500 ($507) could be expected for a household of four.
However, the highest rate of 5 cents would mean gas bills for such households, which use on average 20,000 kilowatt hours of gas annually, would rise by €1,000.
Habeck said the levy aimed to stabilize the gas market.
Support measures would be put in place for those German residents who risk falling into poverty, Habeck said, calling the levy “not a good step, but a necessary step.”
He gave no other details of the measures.
The announcement comes as consumers in Germany are already being put under severe financial pressure by soaring inflation in all sectors.
Why is the levy being imposed?
The price of gas imports has been rising dramatically since Russia began cutting its delivery amid tensions over Moscow’s invasion of Ukraine.
The levy aims to share the costs among all gas users, including industrial consumers, to pay for replacing Russian gas.
Economy Ministry sources have said the levy, which is to go into force October 1, will allow importers to pass on 90% of their costs, which they must currently bear without outside aid.
The “netted price adjustment mechanism” would be valid until the end of September 2024, the sources said, adding that the size of the levy would be announced in August, based on gas prices.
Habeck’s statement comes just days after Russian gas exporter Gazprom cut flows through the Nord Stream 1 pipeline to 20% of capacity.
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