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ENERGY

Oil refinery workers caught in Germany’s energy dilemma

Germany is seeking to ban Russian oil by the end of this year over the war in Ukraine, but workers at the PCK oil refinery outside Berlin are less than happy about the plans.

PCK Oil Refinery Schwedt
Economics Minister Robert Habeck (Greens) gives a speech at the PCK oil refinery in Schwedt/Oder. Photo: picture alliance/dpa | Monika Skolimowska

“We need Russian oil. We have our houses, our families. If (the government) wants to stop it, then the area here will be dead,” Thorsten Scheer, 60, told AFP at the refinery in the town of Schwedt, on the border with Poland.

The plant, which employs 1,200 people, exclusively processes Russian crude oil from a branch of the Druzhba pipeline, the world’s longest oil pipeline.

It supplies around 90 percent of the oil consumed in Berlin and the surrounding region, including Berlin-Brandenburg airport, and many local businesses depend on the cash it brings to the area.

Economy Minister Robert Habeck travelled to Schwedt on Monday to hold a question-and-answer session with the refinery’s employees, where he met a mixed reception.

Standing on a table outside the staff canteen, Habeck sought to reassure the crowd of workers in green and orange overalls that the government would seek alternative ways to keep the plant running.

READ ALSO: Germany warns of possible ‘disruptions’ to oil supply with EU Russia ban

‘Not Germany’s concern’

But employees accused him of serving US interests in seeking to drive a wedge between Germany and Russia.

“Yes, war is rubbish. That is perfectly clear to us,” one worker told the crowd.

“But on the other hand, why should we suddenly ban a business partner who has delivered reliably for decades? We get a raw material and we process it. If this raw material is interrupted out of political correctness, that is not right in my eyes.”

Another worker, 48, who did not want to give his name, told AFP the situation was “stressful for everyone” as their jobs were “hanging in the balance”.

“In my opinion, the war is not Germany’s concern,” he said. “If (the oil embargo) would end the war, fine. But it won’t. Putin will peddle his oil somewhere else.”

Habeck, a member of the Green party, was also met with protests from environmental campaigners, who said they had managed to turn off the oil supply to the PCK plant in advance of his visit.

Germany has ruled out an immediate embargo on all Russian energy in response to the war in Ukraine, especially gas.

However, Europe’s biggest economy has already slashed its oil imports from Russia to 12 percent of the total from 35 percent before Russia’s invasion.

READ ALSO:

Sticky problem 

But the PCK refinery presents it with a sticky problem — especially since the site is majority owned by Russian oil giant Rosneft, controlled by the Kremlin.

In late 2021, Rosneft announced plans to increase its stake in the refinery from 54 to 92 percent by buying shares from Shell.

Germany’s Federal Cartel Office approved the transaction a few days before the outbreak of the war but the Economy Ministry is examining whether it can still be stopped.

PCK oil refinery Schwedt

View of the PCK Industrial Park which houses the PCK oil refinery, just outside Schwedt, some 110km north of Berlin. Photo: John MACDOUGALL / AFP

Habeck laid out three elements that would have to come together to keep the plant alive: new oil deliveries from other countries via ships arriving in the port of Rostock; financial aid from the government; and a new ownership structure to wrest control from Rosneft.

The minister said he was “well aware” that there was “a lot of uncertainty” for the workers.

READ ALSO: ANALYSIS: Just how quickly could Germany wean itself off Russian gas?

“I would be happy if you would see me not just as your enemy, but as someone who is really trying to save this site and keep it alive and lead it into the future,” he said.

But after the meeting, as the workers stood in line to help themselves to barbecued burgers and sausages, many remained unconvinced by his plans.

“It’s an experiment. We all just have to hope it works out,” said Steffen Thierbach, 64.

By Femke Colborne

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ENERGY

Should tenants in Germany be shielded from energy price hikes?

Gas prices have more than tripled in the past year, prompting tenants' rights advocates to call for more social support and a cap on energy costs.

Should tenants in Germany be shielded from energy price hikes?

The German’s Tenants’ Association is calling on the government to put together a new energy relief package to help renters deal with spiralling energy costs.

Gas has become an increasing scarce resource in Germany, with the Economics Ministry raising the alert level recently after Russia docked supplies by 60 percent.

The continued supply issues have caused prices to skyrocket. According to the German import prices published on Thursday, natural gas was three times as expensive in May 2022 as it was in May a year ago.

In light of the exploding prices, the German Tenants’ Association is putting the government under pressure to offer greater relief for renters.

READ ALSO: 

Proposals on the table include a moratorium on terminating tenancy agreements and a permanent heating cost subsidy for all low-income households.

The Tenants’ Association has argued that nobody should face eviction for being unable to cope with soaring bills and is urging the government to adjust housing benefits in line with the higher prices. 

Gas price cap

Renters’ advocates have also joined a chorus of people advocating for a cap on consumer gas prices to prevent costs from rising indefinitely.

Recently, Frank Bsirske, a member of the parliamentary Green Party and former head of the trade union Verdi, spoke out in favour of capping prices. Bavaria’s economics minister and Lower Saxony’s energy minister have also advocated for a gas price cap in the past. 

According to the tenants’ association, the vast majority of tenants use gas for heating and are directly affected by recent price increases.

At the G7 summit in Bavaria this week, leaders of the developed nations discussed plans for a coordinated cut in oil prices to prevent Russia from reaping the rewards of the energy crisis. 

In an initiative spearheaded by the US, the group of rich nations agreed to task ministers will developing a proposal that would see consumer countries refusing to pay more than a set price for oil imports from Russia.

READ ALSO: Germany and G7 to ‘develop a price cap’ on Russian oil

A gas price cap would likely be carried out on a more national level, with the government regulating how much of their costs energy companies can pass onto consumers. 

Strict contract laws preventing sudden price hikes mean that tenants in Germany are unlikely to feel the full force of the rising gas prices this year

However, the Tenant’s Association pointed out that, if there is a significant reduction in gas imports, the Federal Network Agency could activate an emergency clause known as the price adjustment clause.

This would allow gas suppliers to pass on higher prices to their customers at short notice. 

The Tenants’ Association has warned that the consequences of an immediate market price adjustment, if it happens, should be legally regulated and socially cushioned.

In the case of the price adjustment clause being activated, the government would have to regulate the costs that companies were allowed to pass onto consumers to prevent social upheaval. 

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