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Energy firms accused of price gouging

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Energy firms accused of price gouging
Photo: DPA
17:56 CEST+02:00
Gas and electricity firms are not passing along lower prices to German consumers, according to two energy surveys published on Wednesday.

Despite the sinking cost of oil – which sets the wholesale price for natural gas – utilities are only sending along roughly half of the savings to end consumers, a parliamentary study commissioned by the Green party showed.

Gas customers therefore will pay an unjustified €1.6 billion to energy providers in 2009. Internet price service Toptarif.de reported that since many companies have waited till April to lower gas charges the total could rise to €2.1 billion.

“Consumers are being ripped off,” said Green party Vice Chairwoman Bärbel Höhn.

German Economy Minister Karl-Theodor zu Guttenberg said the government would take action against price gougers.

“Gas companies were warned already in autumn 2008 during discussions,” he said, adding consumers should make use of their freedom to change their gas utility if they feel they are being cheated.

Unfortunately for German consumers, the news isn't much better for electricity prices.

The Financial Times Deutschland reported on Wednesday that a new survey by Russell Reynolds Associates found 60 percent of power provides expect no price reductions this year and a third are even banking on increasing costs for electricity.

Even though the resources used to produce electricity such as gas and oil have become more affordable in recent months, almost no savings are being passed along to the consumer, the paper reported.

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