Gas levy: Price of gas to increase by 2,419 cents per kilowatt hour from autumn

Consumers in Germany will pay an additional 2,419 cents for each kilowatt hour of gas from autumn onwards, it has been announced. The new gas levy (Gasumlage) will come into effect at the beginning of October. 

Gas levy means higher gas prices in Germany from October

Households in Germany will face significantly higher utility bills this autumn. The gas transmission system operator, Trading Hub Europe, announced on Monday that gas suppliers in Germany will be allowed to add 2,419 cents per kilowatt hour to the price of gas from October onwards, to help them cope with hugely increased procurement costs. 

It’s not yet clear whether VAT will also be added to the levy. The Federal Finance Ministry has apparently written to the EU Commission to ask for a special exception to waive the VAT requirement on the levy, but has not yet received a response. 

According to ntv, for an average family with an annual consumption of around 20.000 kilowatt hours, the levy amounts to additional costs of approximately 484 euros per year, excluding VAT. The levy comes into effect in October, but according to the Ministry of Economics, it will probably appear on bills for the first time in November or December. 

Levy designed to help struggling gas companies

The federal government recently agreed on the levy as a means to support gas companies that are currently struggling with inflated prices amid an energy shortage, particularly after Russia significantly reduced gas deliveries to Germany. 

Gas importers in Germany have a contractual obligation to supply their customers, especially municipal utility companies. To meet their delivery obligation, therefore, they have been purchasing gas at much higher prices on the short-term market. Up until now, they have not been permitted to pass these additional costs onto consumers. The new gas levy should absorb up to 90 percent of the additional expense, preventing the companies from going bankrupt and causing more volatility on the German energy market.