Germany proposes two-stage plan to cap gas prices, media reports

BERLIN, 10 Oct – PRIME. A German government expert panel has proposed a two-stage solution to cap gas prices for consumers in the country, German magazine Spiegel reported.

According to the publication, first aid should arrive in December this year.

The expert commission on gas and heating agreed overnight on a proposal that will save the country’s gas consumers from high prices. The authors of the material reported that the members of the commission agreed on a two-stage procedure for private clients, as well as small and medium-sized enterprises.

According to the statement of the commission, quoted by the magazine, in the first stage in December, the state should take over the advance payments of all gas consumers with a standard load and consumers of district heating on a one-time basis. However, suppliers must waive the upfront fee, which will be refunded by the federal government no later than December 1st.

Thus, the high expected payments on the account in January and February 2023 will be “partially offset,” Spiegel notes. That is, the state will assume obligations under the gas contracts of consumers for one month.

As part of the second stage, a so-called “compensation model” is to be introduced from March, according to which part of the gas bill will be paid at a subsidized price, and the rest at the then high gas prices.

According to the publication, the commission in this regard intends to offer a fixed price of 12 cents per kilowatt-hour for both private and commercial consumers. At the same time, 80% of kilowatt-hours should be subsidized.

The package for private, commercial and industrial consumers of gas and district heating will be valid until spring 2024. According to the first rough estimates, its volume is up to 90 billion euros, the publication specified.