Price hike for German consumers set for autumn: press
German gas utilities will be permitted to increase consumer gas prices to cover the estimated 90% pricing differential expected to arise from sourcing non-Russian imports, ForexLive reported on July 22.
German chancellor Olaf Scholz confirmed the gas price in a press conference earlier today. The decision was expected, with wholesale gas prices on the TTF contract for delivery in September 2022 currently at €164.7/MWh, and given Berlin will also need to pour in structural financing. Scholz himself has referred to the possibility on several prior occasions.
Scholz also criticised Russia for failing to meet its gas supply commitments, underscoring continued tensions between Gazprom and its main European customers amid the Ukraine war. Gazprom has significantly reduced the product it sends via the Nord Stream 1 pipeline route to Germany, claiming it has been unable to repair "technical" issues along the route. Nord Stream 1 would typically pump up to 55bn m3/yr of Russian gas, much of it to German customers.
The decision to increase German consumer rates comes as Berlin has struck a deal to rescue German-Finnish utility Uniper, which will see it buying a 30% equity stake. Scholz suggested the bail-out was unavoidable from a public policy perspective given that much of Germany's energy industry depends indirectly on Uniper's operations.