Scholz’ experts explain model – Austria not enthusiastic
The expert commission’s draft for the gas price cap is in place. The relief for consumers and companies is to come in two stages.
Update from October 11, 9:31 am: The German plans for a gas price brake are met with skepticism in neighboring Austria. Austrian Chancellor Karl Nehammer said he was “in principle” in favor of such a mechanism wheal from Tuesday. “But this gas price brake can only be organized at European level. Going it alone is out of the question”, also because this could distort competitiveness in the European internal market.
Nehammer sees the EU Commission as having a duty: “We’ve been waiting for Brussels for months,” he complained. “The EU must shoulder a jointly determined price for gas used for electricity generation and pass this on to consumers,” Nehammer demanded. “This is the only way to finally decouple the high gas prices from electricity prices.” Market prices would have to be paid for the gas, “otherwise the EU would not receive any gas,” admitted Nehammer. “The difference between the market purchase price and the price for the consumer would have to be borne by the public sector.”
Consumer advocates criticize the gas plans of the experts
Update from October 10, 12:40 p.m.: Consumer advocates have criticized the one-time payment for December proposed by the Gas Commission as “socially unfair”. The chairwoman of the Federal Association of Consumers (vzbv), Ramona Pop, explained on Monday: “The planned, fundamentally correct one-off amount helps quickly and unbureaucratically, but is again the watering can principle.” The money should be better staggered according to income. In addition, there is no safety net for those affected “who cannot cope with the exploding gas and district heating prices”. The vzbv has been calling for a moratorium on gas, district heating and electricity cuts for months.
“It’s taking revenge that the federal government set up the commission far too late.” In the short time available, the committee was able to present “only a minimal solution”. A price brake for part of gas consumption relieves consumers. “But there is also a problem of justice here: those who have used a lot of energy in recent years are rewarded,” says Pop. “Unfortunately, those who have made efforts to conserve energy have not.”
Gas price brake and gas special payment – the proposals of the Commission
Update from October 10th, 11:22 am: The press conference is over. The most important information for consumers summarized:
- Gas and district heating customers are to receive a one-off payment in December. The one-off payment is to be determined on the basis of the usage that dates back to the advance payment in September. This payment is intended to serve as a financial bridge until the introduction of the gas price brake.
- From the beginning of March 2023 until at least the end of April 2024, a gas and heat price brake should take effect. This provides for a state-guaranteed gross price of 12 cents per kilowatt hour for a basic quantity of gas. Above this quota, market prices should apply. The basic quota should be 80 percent of the consumption on which the advance payment for September 2022 was based.
- A heat price brake is to come for district heating customers. Similar to the gas price, there should be a guaranteed gross price of 9.5 cents per kilowatt hour of district heating, for a basic quota of 80 percent of consumption.
- The government now has to decide on the proposals of the expert commission.
Gas price brake and one-off payment cost the Treasury 96 billion euros
Update from October 10, 10:50 a.m.: The one-off payment due in December will cost around five billion euros. Overall, the costs for the entire package, including the gas price brake, should be around 96 billion euros.
Higher gas price becomes the “New Normal”
Update from October 10th, 10:42 am: Economics Veronika Grimm explains that “speed is of the essence” in order to quickly relieve households. The two-stage model aims to remedy this. “Every month you get a state subsidy on the down payment, so the price drops to twelve cents per kilowatt hour.” However, Grimm makes it clear that the gas price will no longer drop to seven cents. The twelve cents would now be the “New Normal”. In a first step, the state should also take over the gas deductions for the month of December from the experts.
Update from October 10th, 10:37 am: Speed was particularly important when preparing the recommendations. Citizens are expected to benefit from the plans by the end of 2023. Nevertheless, “savings incentives should remain”, explains commission member Michael Vassiliadis.
Update from October 10, 10:30 a.m.: The members of the expert commission will now present the results in a press conference. The proposals were previously handed over to Chancellor Olaf Scholz.
SPD boss Klingbeil calls for swift action on the gas price brake and one-off payment
Update from October 10th, 9:58 am: SPD leader Lars Klingbeil assumes, in his own words, that the planned energy savings will reach the citizens this year. The expert commission of the proposal commission for the development of the gas price brake is a good guideline for politics, Klingbeil told the broadcasters on Monday RTL and nv according to notification. “My expectation is that money will still reach the citizens this year. And so action must now be taken quickly.”
Commission of experts agrees on proposals for relief
First report from October 10, 8:54 a.m.: Berlin – On Monday morning, the federal government’s commission of experts agreed on proposals to curb gas prices. The implementation is to take place in two stages.
Gas price brake: 80 percent of consumption for a capped price
In addition to the gas price brake, the model also provides for a one-off payment in the amount of a monthly bill this year. In addition, there should be quotas at capped prices for business and consumers from March or April. Each household customer receives a state-subsidized quota of 80 percent of their expected consumption.
According to various reports, the price could be between twelve and 14 cents per kilowatt hour. The remaining 20 percent of the requirement would be settled at the market price. The experts want to set an incentive to save. For industrial gas customers, there will be a fixed and thus capped price of 7 cents per kilowatt hour for 16 months from January for 70 percent of annual consumption.
Gas price cap and special payment: relief for consumers
The chairmen of the commission on the gas price brake want to hand over the proposal, which was developed in a conference at the weekend, to Chancellor Olaf Scholz (SPD) in the morning and then present it to the public.
The price cap is intended to be a central rescue tool for the federal government in the energy crisis. The traffic light coalition has announced a “defense shield” of up to 200 billion euros to support consumers and companies because of rising energy prices. A gas price brake could cap the prices for at least part of consumption in such a way that private households and companies are not overwhelmed. (ph/dpa)