An expert gas commission in Germany has submitted a final proposal to the government, calling for a gas price cap at 12 euros cents per kilowatt hour to cover 80% of household gas consumption beginning in March and running until April 2024, Reuters reports.
The gas price cap is meant to aid households that are now dealing with gas prices that are over 2.5 times higher than this time last year as soaring energy prices risk industrial shutdowns and job losses in the wake of Russia's invasion of Ukraine.
The proposal, if accepted by the government, would bring current average gas prices for October down from 18.6 euro cents per kWh to 12 euro cents, according to Reuters, citing Check24. That amount would potentially save German households over 1,000 euros annually.
For industrial consumers, the price cap proposal recommends 7 euro cents per kWh beginning in January and running until April 2024, for 70% of consumption. That move is expected to keep companies from closing down and shedding jobs.
The German cabinet will decide on the proposal on Wednesday this week.
On Sunday, Reuters reported that the German government could implement certain conditions in order to benefit from the gas price "brake" and lower fuel sales taxes, which includes maintaining 90% of jobs for a year.
Those opposed to potential gas relief packages are concerned that such policies would make it more difficult to source supply.
Labor unions and lobby groups had also warned that small- and medium-sized businesses were considering moving to cheaper jurisdictions, and the expert commission's proposal is hoping to avert this.
Germany's insurance industry also warned consumers on Monday against "dangerous experiments" to heat amid soaring energy prices.
The insurers are concerned that the risk of fire is rising with the use of candles, too many electric heaters, or makeshift fireplaces.
By Charles Kennedy for Oilprice.com
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