Top Stories
German gas commission agrees proposals to ease impact of soaring prices
Global Banking & Finance Review®
Company
BERLIN (Reuters) -Germany’s expert commission charged with drawing up plans to ease the impact of soaring gas prices on consumers agreed on a set of proposals early on Monday, sources close to the talks said.
BERLIN (Reuters) -Germany’s expert commission charged with drawing up plans to ease the impact of soaring gas prices on consumers agreed on a set of proposals early on Monday, sources close to the talks said.
A draft of a paper seen by Reuters earlier showed the commission favoured the state giving households and businesses a one-off payment worth one month’s gas bill this year and a price brake from next March or April.
The commission is still working on a separate scheme for big gas consumers in the industrial sector.
In a second phase, the state could subsidize 60-80% of projected gas consumption, with consumers having to pay the remainder at market prices, incentivising energy savings. The subsidized price could come in around 12-14 cents per kilowatt hour (kWh), according to the paper.
If adopted, the scheme would be paid for by a 200 billion euro ($194 billion) relief package Chancellor Olaf Scholz’s government announced late last month to soften the impact of soaring energy prices on Europe’s largest economy.
The commission will present an intermediate report at a news conference on Monday. The government is expected to take over its main findings. An economy ministry spokesperson said it did not have a finalised concept yet.
Experts say the upside of a one-off payment is that it provides immediate relief. The downside is that it provides no incentives to save despite estimates that at least 20% of gas savings are needed to avoid shortages.
The gas price brake takes longer to implement.
(Reporting by Markus Wacket; Writing by Sarah Marsh and Paul Carrel; Editing by Cynthia Osterman, Robert Birsel)
A one-off payment is a single payment made to individuals or businesses, often used to provide immediate financial relief during times of economic hardship.
An energy price brake is a mechanism designed to limit the price increase of energy, protecting consumers from sudden spikes in energy costs.
Energy savings incentives are programs or financial rewards designed to encourage consumers and businesses to reduce their energy consumption.
Explore more articles in the Top Stories category
