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Dobrindt calls for a limited “citizen base price” for gas

Nicholas by Nicholas
July 5, 2022
in News
0

CSU regional group head Alexander Dobrindt has demanded the introduction of a limited “citizen base price” for gas in order to secure the supply of private households in the looming gas crisis. With such a base price to be developed by the federal government, a cap will ultimately be set on a basic requirement per household and person, said Dobrindt on Tuesday in Berlin. Such a signal to the public is important because otherwise households would not be able to bear the financial burden of the further exploding gas prices.

Families should be relieved more than single households, Dobrindt demanded. A volume cap could ensure that large consumers would be less relieved than small consumers. “Without this solution, many households will probably not be able to afford the rising gas prices in the coming months,” he said. There must also be a regulation that the gas supply will not be shut down if the gas price can no longer be paid.

The planned measures to support gas companies would not be enough, Dobrindt predicted. Ultimately, in the next few days, there will be talk about the nationalization of gas companies. “Gas companies will come into public hands, into state hands, because they can no longer survive on their own.” This is a reasonable solution that has also been used in other places in the past in crises.

The federal government wants to create a “protective shield” for ailing energy companies. In the wake of the shortage of Russian gas, the federal cabinet has approved a bill that would allow the state to take over stakes in struggling energy companies. Uniper SE, whose business depends on cheap Russian gas, is likely to be the first company to receive government support. The company needs up to 9 billion euros – about twice its market value – as was heard on Monday.

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The legislative package allows the state to put together rescue packages that also include the takeover of company shares. There is also a mechanism to pass on part of the increasing gas costs from the utilities to the consumers. The draft is to be passed by the Bundestag and Bundesrat in the course of the week.



The government had to act unusually quickly and urgency is needed: the Nord Stream natural gas pipeline will temporarily stop supplying gas from July 11 due to scheduled maintenance work. This increases the pressure on the already tense markets. Whether Moscow will turn the pipeline back on after the maintenance is uncertain. For Germany, that would mean the loss of one of the most important sources of supply.

Analysts estimate that reducing gas flows from Russia will cost Uniper EUR 30 million per day, as the company has to buy the missing quantities on the market at great expense. The government is currently in talks with Uniper and its main shareholder Fortum Oyj about a rescue package. Uniper shares rose as much as 11 percent on Tuesday after losing more than a quarter on Monday. Uniper later gave back their profits and listed little changed.



Tags: Alexander Dobrindtbasic needscitizen base priceCSUfederal governmentgas pricelid

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