Gas price brake to apply retroactively from January

In the gas price brake, citizens and companies are to be relieved retroactively for January and February 2023. So far, it was clear that relief would be provided from March 2023 until the spring of 2024. According to a draft bill made available to the German Press Agency on Tuesday, the relief amount calculated for the month of March is to be extended to the months of January and February "retroactively, as it were". Previously, the "Spiegel" had reported on this.

This approach is also planned for the electricity price brake. With the multi-billion euro energy price brakes, the German government is reacting to the sharp rise in energy prices and wants to cushion the burden on private households and companies. In a first step, the Bundestag and Bundesrat decided on a one-off payment in December.

Under the gas price brake, households and small and medium-sized enterprises are to receive a guaranteed gas gross price of 12 cents per kilowatt hour for 80 percent of their previous consumption. For the remaining 20 percent of consumption, the contract price is to apply.

For district heating, the guaranteed gross price is to be 9.5 cents. A gas price brake is also planned for industry, starting in January. These large consumers are to receive a guaranteed price of 7 cents per kilowatt hour net for 70 percent of their previous consumption volume.

The relief for industry is subject to conditions. For example, no dividends may be paid for the duration of the stabilization measure, according to the draft.

By far the largest part of the energy price brakes is to be financed via a "defense umbrella" with a volume of up to 200 billion euros, for which the federal government is taking on new debt.

Russia's war of aggression against Ukraine, which is contrary to international law, has increasingly aggravated the situation on the energy markets in Germany and Europe over the course of 2022, the draft states. In particular, the recent very large price increases for natural gas and heat represent a "considerable, in some cases existence-threatening burden" for the population and companies in Germany. "They are an enormous socio-political and economic challenge."

The price brakes were intended to cushion rising energy costs and the most severe consequences for consumers and companies. The German government had appointed a commission of experts for this purpose.

Photo by Kwon Junho