As rising energy prices clobber people, German govt will pay their gas bills in December

In Germany, a government-appointed state panel has recommended a two-stage cap on energy prices, by which the state would pay gas bills for all households and small to medium-sized businesses in December. Energy flow to Germany has been hit by halt from Russia, its largest supplier, in the wake of the war in Ukraine.

According to a report in The Guardian, the plan calls for a one-time full reimbursement in December, to be followed the next spring by a more customised subsidy programme aimed at capping costs while still encouraging energy conservation.The proposed two-step scheme will cost around €90 billion or $87.25 billion, said German Industries President Seigfried Russwurm.

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Dr Veronika Grimm, the expert panel's co-chair, said the subsidised prices will give companies and households a chance to adjust to the new normal so that they can plan ahead. It would do this without artificially returning to the pre-Ukrainewar low prices.

"It’s not going to be the case that the price goes back down to 7 cents in the future", Grimm said, adding , "we won’t receive Russian gas for a long time."

In September, German Chancellor Olaf Scholz had also announced an "economic defence shield" of up to €200 billion, which will be set up to help shoulder soaring energy prices, by taking on new loans, reported Reuters.

Scholz called the measure a "double bang" and stated that it was necessary "to get us through this difficult time."

Private houses would pay €0.12 (a little less than $0.12) per kilowatt hour from March 2023 to the end of April 2024 for the first 80 per cent of their gas usage in the previous year.

From 1 January 2023 through the end of April 2024, the industry would pay €0.07 ($0.068) per kilowatt hour for the first 70 per cent of last year's use.

Speaking at an engineering conference on Tuesday, Scholz stated that if individuals, businesses, and officials continue to adjust to the country's altered energy situation, Germany will survive the winter. He also noted that Germany is almost at its goal of having its gas storage facilities 95 per cent full.

"I am happy to say to you today: If we all continue to adapt to the changed situation - the citizens, the companies and the politicians - then we will get safely through this winter."

(With inputs from agencies)

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