Germany’s lower house of parliament on Thursday approved an emergency package aimed at cushioning the impact of high gas prices and easing the economies of German households.
The measure has to be voted on next Monday by the Upper House and is intended to help not only households, but also small and medium-sized enterprises amid a generalized rise in prices that has been aggravated by the Russian invasion of Ukraine.
It is therefore the first step to limit gas prices in the country by introducing a cap that will apply from March next year, German Chancellor Olaf Scholz’s government said in early November.
Christian Democrat opposition politician Mark Helfrich has criticized the initiative as «too complicated,» while the conservative opposition bloc in Parliament has argued that the gas price cap should be retroactive to the beginning of the year.
Specifically, the second leg of the measure proposes to introduce in March 2023, with retroactive effect on the February bill, a gas price brake for households and SMEs that will be in force until April 30, 2024, whereby customers will receive up to 80 percent of their expected annual consumption, based on the forecast as of September 2022, at a cost of 12 cents per kilowatt hour. For heating consumers, the maximum price will be 9.5 cents.
The German government has thus decided to limit gas prices by introducing a cap that will apply from March next year, in addition to announcing emergency aid to meet the cost of the December gas bill for households and small businesses.
The emergency measure, estimated to cost around €9 billion, will be financed under the €200 billion «shield» in aid to combat inflation. Specifically, end consumers of natural gas will not be obliged to make advance or fractioned payments corresponding to December 2022.
In the case of heating, due to different contractual structures, the December relief will take the form of a lump-sum payment based on the amount of the advance payment made in September plus an adjustment factor.
Also, from January 2023, the price of electricity for households and small and medium-sized enterprises will be capped at 40 cents per kilowatt-hour, at a total cost of some 33 billion euros.
