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ENERGY

Gas operators announce level of surcharge for German customers

Gas customers in Germany will face significant additional energy costs from the autumn. The state gas surcharge will be 2.419 cents per kilowatt hour.

A gas flame burns on a kitchen stove in an apartment.
A gas flame burns on a kitchen stove in an apartment. Photo: picture alliance/dpa | Hauke-Christian Dittrich

On Monday, Trading Hub Europe, a joint venture of German gas transmission system operators, announced a state gas surcharge of 2.419 cents per kilowatt hour.

The levy, which is intended to benefit gas suppliers who have had to find more expensive alternatives to Russian gas supply, will apply from the beginning of October. 

READ ALSO: How Germany is saving energy ahead of uncertain winter

For a single-family household with an annual consumption of 20,000 kilowatt hours, the additional cost would therefore amount to around €484 a year, before VAT. However, the German government wants to prevent VAT from becoming charged on the tax levy.

The levy had been expected for some time, and the Ministry of Economics had predicted that the surcharge would fall between the range of 1.5 to 5 cents per kilowatt hour. The additional 2.419 cents, therefore, falls in the lower range of the expected cost.

The Ministry of Economics sees the levy as a consequence of the Russian war in Ukraine. Since mid-June, Russia has reduced its gas imports to Germany in an unpredictable manner, which has created an energy shortage and driven up prices.

READ ALSO: ‘Winter of rage’: Experts warn of riots in Germany due to rising energy costs

This “external shock” is particularly affecting Germany, which has so far been heavily dependent on cheap gas from Russia. 

The levy, which will apply from the beginning of October, will not be immediately visible on customers’ bills. For consumer protection reasons, announcement periods of four to six weeks must be followed by the Energy Industry, meaning the additional charge will probably first appear on bills in November or December.

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ENERGY

Germany’s Scholz in Saudi Arabia on Gulf energy hunt

German Chancellor Olaf Scholz arrived Saturday in Saudi Arabia at the start of a two-day Gulf tour, in the hope of sealing new energy deals with the fossil fuel exporters.

Germany's Scholz in Saudi Arabia on Gulf energy hunt

Scholz, accompanied by a sizeable industry delegation, was received at Jeddah airport on the Red Sea coast by Mecca region’s governor Prince Khalid bin Faisal Al Saud.

Afterwards, he went into a meeting with Saudi Arabia’s de facto ruler Crown Prince Mohammed bin Salman.

He is also scheduled to meet a group of Saudi women, before heading to the United Arab Emirates on Saturday evening and then to Qatar on Sunday.

The chancellor hopes to agree new energy partnerships with the oil- and gas-rich Gulf states, with the loss of supplies from Russia in the wake of its invasion of Ukraine.

Scholz however is faced with a diplomatic balancing act, as he will have to navigate significant differences with his hosts over human rights.

Scholz’s meeting with the Saudi crown prince is seen as particularly sensitive.

Until recently, Prince Mohammed was regarded as a pariah in the West due to the murder of Washington Post journalist Jamal Khashoggi in 2018.

The German government strongly condemned the journalist’s murder and would not be “editing” its position, government sources indicated ahead of the tour.

Saudi Arabia’s importance as a fossil fuels exporter and regional power meant a “solid working relationship” was needed with the crown prince, a government source explained.

The 37-year-old Prince Mohammed was likely to steer the country through “the next 10, 20 or 30 years”, he added.

Berlin wants to extend cooperation on new technologies such as green hydrogen produced using renewable energy, which Germany could import in vast quantities from the Gulf states, said government sources.

The chancellor would also seek to strengthen political cooperation with the regional powers, courted on the other side by Russia and China.

“We have to work with Saudi Arabia if we want to sort out, for example, the question of the war in Yemen or tackle the Iranian question,” the government source said.

On Sunday morning, Scholz will meet with UAE’s President Sheikh Mohamed bin Zayed Al-Nahyan.

Later that day, the chancellor will travel to gas-rich Qatar to hold talks with Emir Sheikh Tamim bin Hamad Al-Thani.

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