German expert panel proposes 2-stage gas price subsidy

Oct 10, 2022, 12:37 AM | Updated: 9:33 pm
From left, Michael Vassiliadis, Chairman of the German Mining, Chemical and Energy Industrial Union...

From left, Michael Vassiliadis, Chairman of the German Mining, Chemical and Energy Industrial Union, Siegfried Russwurm, President of the Federation of German Industries e. V and Veronika Grimm, member of the German government's Council of Economic Experts, hand over the report containing the proposal of the Independent Commission on Natural Gas and Heat to German Chancellor Olaf Scholz, Robert Habeck, Federal Minister of Economics and Climate Protection, and Christian Lindner, Federal Minister of Finance, in Berlin, Monday, Oct. 10, 2022. A government-appointed expert panel is proposing a two-stage system for distributing up to $195 billion in subsidies Germany has announced to ease the strain of high energy prices. German news agency dpa reported Monday that the panel will suggest one-off payments to natural gas customers equivalent to a single monthly bill this year, followed by a price subsidy for part of people's consumption next year. (Kay Nietfeld/dpa via AP)

(Kay Nietfeld/dpa via AP)

BERLIN (AP) — A government-appointed expert panel on Monday proposed a two-stage system for distributing some of the up to 200 billion euros ($195 billion) in subsidies Germany has announced to ease the strain of high energy prices, a plan that the group said would still encourage people to save gas.

The panel suggested that the state take on the cost of natural gas customers’ monthly bill in December, followed by a price subsidy for part of their consumption starting next spring.

That “gas and heating price brake” would kick in next March and apply until April 2024, panel co-chair Veronika Grimm said. Private gas customers would pay 0.12 euros per kilowatt hour for the first 80% of the amount they used in 2021.

That “corresponds roughly to the price level that is expected in the future,” Grimm said, telling reporters in Berlin that the plan aims to introduce a “new normal” but prevent price rises beyond that. “It’s not going to be the case that the price goes back down to 7 cents in the future — we won’t receive Russian gas for a long time.”

Grimm argued that the plan still incentivizes people to save gas, because people who do so will avoid paying higher prices beyond the cap level. She noted that Germany, which has Europe’s biggest economy, needs to reduce its previous gas consumption by about 20% to prevent a potential shortage this winter.

Co-chair Siegfried Russwurm, the head of the Federation of German Industries, said the proposal foresees businesses paying 0.07 euros per kilowatt hour for 70% of their 2021 gas use, starting at the beginning of January.

Russwurm said that gas price rises are posing an “existential” threat to an increasing number of companies.

“This is not just about the fate of individual companies and their jobs; it is about the strength and the export successes of German industry, because they are the backbone of the German economy,” he said.

The panel, which included representatives of industry and labor unions, scientists and lawmakers, earlier Monday presented its conclusions to Chancellor Olaf Scholz and the country’s economy and finance ministers. It put the cost of the proposed gas price subsidies at about 90 billion euros.

Many European countries have proposed similar subsidies on fossil fuels, prices for which have increased sharply worldwide in the wake of Russia’s attack on Ukraine. But some of Germany’s neighbors have criticized the huge sum Berlin is setting aside, arguing that it will price others out of the market.

Scholz argues that the criticism is based on a misunderstanding of his government’s plans and says Germany’s subsidy will prevent a shortage of gas that might occur under a system of enforced price caps proposed by other countries. He also has noted that it applies to a relatively long period.

The government will “work very quickly on implementing the proposals” by the panel, Scholz spokesman Steffen Hebestreit said. He noted that a check on whether they comply with European Union law will be necessary, and said that Germany “will act in European solidarity.”

Russia started reducing gas supplies to Germany through the Nord Stream 1 pipeline, the main supply route, in June and cut them off completely over a month ago. The pipeline has since been damaged by underwater explosions.

Germany got a bit over a third of its gas supplies from Russia before the supply disruptions started, and previously more than that.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

This image released by Marvel Studios shows a scene from "Black Panther: Wakanda Forever." (Marvel ...
Associated Press

‘Wakanda Forever’ is No. 1 for 4th straight weekend

NEW YORK (AP) — “Black Panther: Wakanda Forever” kept the box-office crown for the fourth straight weekend, and the comic holiday thriller “Violent Night” debuted with $13.3 million, according to studio estimates Sunday. But the biggest talking point on the weekend was a movie conspicuously absent from theaters. Had Netflix kept Rian Johnson’s whodunit sequel […]
21 hours ago
FILE - San Francisco Giants' Barry Bonds hits a single against the Chicago Cubs during the third in...
Associated Press

Bonds, Clemens left out of Hall again; McGriff elected

SAN DIEGO (AP) — Moments after Fred McGriff was elected to the Baseball Hall of Fame, almost two decades after his final game, he got the question. Asked if Barry Bonds belonged in Cooperstown, a smiling McGriff responded: “Honestly, right now, I’m going to just enjoy this evening.” A Hall of Fame committee delivered its […]
21 hours ago
FILE - Capital murder defendant and former U.S. Border Patrol Juan David Ortiz looks around the cou...
Associated Press

Jurors hear ex-Border Patrol agent’s confession in killings

SAN ANTONIO (AP) — Jurors in the capital murder trial of a former U.S. Border Patrol agent have heard a taped interview in which he confesses to the 2018 killings of four sex workers in South Texas. If convicted of capital murder, Juan David Ortiz, 39, faces life in prison without parole because prosecutors are […]
21 hours ago
FILE - A Twitter logo hangs outside the company's San Francisco offices on Nov. 1, 2022. A top Euro...
Associated Press

As Musk is learning, content moderation is a messy job

Now that he’s back on Twitter, neo-Nazi Andrew Anglin wants somebody to explain the rules. Anglin, the founder of an infamous neo-Nazi website, was reinstated Thursday, one of many previously banned users to benefit from an amnesty granted by Twitter’s new owner Elon Musk. The next day, Musk banished Ye, the rapper formerly known as […]
21 hours ago
FILE - In this photo taken by an individual not employed by the Associated Press and obtained by th...
Associated Press

Iran morality police status unclear after ‘closure’ comment

CAIRO (AP) — An Iranian lawmaker said Sunday that Iran’s government is “paying attention to the people’s real demands,” state media reported, a day after a top official suggested that the country’s morality police whose conduct helped trigger months of protests has been shut down. The role of the morality police, which enforces veiling laws, […]
21 hours ago
Secretary of State Antony Blinken speaks at the J Street National Conference at the Omni Shoreham H...
Associated Press

Blinken vows US support for Israel despite unease over gov’t

WASHINGTON (AP) — Secretary of State Antony Blinken said Sunday the U.S. will not shrink from its unwavering support for Israel despite stark differences with Prime Minister-elect Benjamin Netanyahu and concerns the Biden administration may have about potential members of his incoming right-wing government. Speaking to a left-leaning group that some on the right accuse […]
21 hours ago

Sponsored Articles

...
Quantum Fiber

How high-speed fiber internet edges out cable for everyday use

In a world where technology drives so much of our daily lives, a lack of high-speed internet can be a major issue.
(Desert Institute for Spine Care photo)...
DESERT INSTITUTE FOR SPINE CARE

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
...
Day & Night Air Conditioning, Heating and Plumbing

Here are 4 signs the HVAC unit needs to be replaced

Pool renovations and kitchen upgrades may seem enticing, but at the forefront of these investments arguably should be what residents use the most. In a state where summertime is sweltering, access to a functioning HVAC unit can be critical.
German expert panel proposes 2-stage gas price subsidy