Energy costs for German households could soar significantly later this year, the country's energy industry has warned, with one company suggesting this could lead to social unrest.
Per a Reuters report, energy sector officials said that household energy costs could increase threefold from current levels, with one industry executive saying annual costs could rise from 1,500 euros to 4,700 euros by October.
"We must help average households and set an upper limit for energy costs," Roland Warner told Reuters in an interview, adding, "If we get social unrest the state won't be able to cope."
Separately, the report cited an interview with the head of Germany's Federal Network Agency, the energy regulator, who said that Germans should set aside money for their future energy bills and reduce their energy consumption.
The industry has also called on the government to impose energy price caps to shield consumers from the worst of the price spike. The government, Reuters notes, has not been supportive of the price cap idea, with Economy Minister Robert Habeck recently saying that this would betray the idea of encouraging people to conserve energy.
Germany, because of its significant dependence on cheap Russian gas, is in a state of panic after Gazprom reduced flows along the Nord Stream 1 pipeline prior to its suspension this week for regularly scheduled annual maintenance.
There is growing fear among German politicians in power that the Russian company might not restart the flow of gas after maintenance ends in retaliation for EU sanctions for its incursion into Ukraine.
To prevent a collapse of the economy, the government has been desperately looking for alternative suppliers, but the global gas market has been as tight as the oil market, and Germany has yet to build the import infrastructure necessary to replace part of Russian gas imports with LNG. Conservation, therefore, has emerged as the primary means of coping with the looming crisis.
By Irina Slav for Oilprice.com
- Boris Johnson Resigns As Energy Crisis Worsens And Scandals Mount
- The EU Has Frozen $13 Billion In Russian Assets
- Solar Stocks Soar As China Considers $220 Billion Stimulus Package