Pressure mounts on Germany to prevent energy firms from taking advantage of gas levy

The Local
The Local - [email protected] • 26 Aug, 2022 Updated Fri 26 Aug 2022 09:52 CEST
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The German government has announced everything from one-off transfer payments, windfall taxes on energy profits, and tax relief to help with rising inflation and energy bills. Photo: picture-alliance/ dpa | Jörg Carstensen

Faced with a backlash against the revelation that some energy companies could profit from the gas levy, Germany's Economics Minister has said that he will review the regulations.

From October, gas users in Germany will pay an extra 2.419 cents per kilowatt hour for their gas under the new gas levy. The surcharge has been brought in as a means to support energy companies which are struggling to stay in business as a result of the scarcity of cheap Russian gas.

However, as reported by The Local, there has been strong criticism of the levy, as it has come to light that some of the companies which have applied for support from the extra funds do not face an existential threat, and that some could even end up profiting from the extra contributions from consumers. 

READ ALSO: Will energy companies profit from Germany’s gas levy on consumers?

On Thursday, Germany's Economy and Climate Minister Robert Habeck (Greens) said that the levy had become a "political problem", adding that the revelations had "really soured" his day. 

As a result of the backlash, he announced that he intends to review the controversial gas levy - and that the group of eligible companies should be reduced as much as possible.

Habeck said that, in principle, the gas surcharge was the right decision, but that some companies had "forced their way in" that "have really earned a lot of money and don't need the levy from the people".

He said that it was "not morally correct" for companies that have earned a lot of money, to then be able to turn to the general public for help.

The minister warned that a revision of the levy is not without risk, however.

"If we start to fiddle with the levy and it is susceptible to lawsuits - and there will definitely be lawsuits against it in one direction or another - and the levy ends up being removed, then we fall back to the problem we have - that some of the companies and the citizens face a collapse of gas supply," Habeck warned.

READ ALSO: EXPLAINED: How much will Germany’s gas levy cost you?

Finance Minister Christian Lindner and leader of the Free Democrats (FDP), which is in the government coalition with the Greens and the Social Democrats, has also said he wants to improve the surcharge and make it more targeted.

"A measure for solidarity cannot serve to allow individual companies to cultivate their returns and make profits from it," the FDP leader told German broadcaster ZDF.

He said the measure that would have to be looked at again closely and that "if there's a need to change something to make this instrument more targeted so that consumers benefit, then we're not afraid to make corrections."

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