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The new gas levy on consumers in Germany, designed to help German energy firms cover the costs of natural gas imports and expected to enter into force on October 1, may have to be adjusted as soon as winter comes, with the adjustment up or down depending on market conditions, according to market operator Trading Hub Europe (THE).
"Because of dynamic development, I assume that the levy will have to be adjusted as early as this winter," Torsten Frank, Managing Director of the operator, told German newspaper Rheinische Post as carried by Reuters.
Germany has recently announced it would impose a gas levy on consumers from October 1 through March 2024 as it aims to help energy providers and importers of natural gas, which are struggling with low Russian gas supply and very expensive alternatives to Russian gas.
The new natural gas tax designed to keep importers afloat during the energy crisis prompted by Russia's invasion of Ukraine is set to cost German families, who will have to foot the bill for the tax, an extra $500 a year. Starting on October 1 and running through April 2024, the new natural gas tax aims to help German utilities, most notably Uniper, recoup costs related to replacing supplies from Russia. The new tax has forced Berlin to examine ways to assist some German families financially, with German Chancellor Olaf Scholz tweeting last week that steps would be taken to ensure that poorer families are not overwhelmed.
German gas importers have already made initial claims to receive $34.03 billion (34 billion euro) of payments which the market operator will collect from the new gas levy on consumers. Two-thirds of those claims have been made by Uniper, which the German government bailed out last month with a $15 billion package, a source with knowledge of the matter told Reuters this week.
Germany is concerned that supply via Nord Stream—now at just 20% of the pipeline capacity—would be further cut or completely halted after Gazprom said last week it would stop all gas flows to Europe via the Nord Stream pipeline from August 31 until September 2. The reason for the 3-day suspension of gas flows is maintenance work at the Trent 60 gas compressor station, which would be carried out with Siemens, according to Gazprom.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,