The Union does not want to accept the federal government’s regulation for a state gas surcharge. “The gas levy that has now been decided in the federal cabinet has significant technical errors. It is also not fair,” said the deputy head of the Union faction, Jens Spahn, of the German press agency. People on low incomes have been waiting for real relief for months. That doesn’t go together.

Spahn added: “It’s almost cynical that the state still earns money from the special levy via VAT. Citizens pay up to 100 euros more than they should.” The second planned levy, the storage levy, would mean additional burdens for consumers. “If the traffic light doesn’t improve quickly here, we will apply to the German Bundestag for the repeal of this regulation on the gas surcharge,” said the CDU politician.

From circles in the Ministry of Economic Affairs led by Robert Habeck (Greens), it was said that it was important that no VAT was charged on the levy. “It’s not transferrable.” But here the responsibility lies with the FDP-led Ministry of Finance. This must check how that works.

Linder is responsible and checks

Finance Minister Christian Lindner says he is examining all options for exempting the planned gas levy from VAT. “As Federal Finance Minister, I don’t want to tax the gas levy,” says the FDP politician of the German Press Agency. It is absurd to burden gas customers even more as a state. However, the federal government is bound by EU law. “I will now exhaust all legal and political options to avert an additional burden,” promised Lindner. New burdens are not necessary, but relief for the broad middle.

From circles in the Ministry of Finance, it was said that the Ministry of Climate Protection and Economic Affairs designed the surcharge in such a way that, according to European law, VAT should actually be incurred.

Debate on the role of the energy industry

Criticism of the surcharge also came from industry. VDA President Hildegard Müller admitted: “The gas levy regulations that have been passed are a necessary evil in order to maintain Germany’s energy supply.” But: For a fair distribution of the burden, the federal government should have made the energy industry more responsible. Instead, companies and private consumers should be burdened beyond measure. The head of the Association of the Automotive Industry called for further relief for the industry, such as a reduction in electricity tax. In addition, there is a need for a hardship clause in order to rule out burdens that could endanger the existence of the company.

The energy associations BDEW and VKU called on the federal government to make improvements. In a letter to Habeck, which was available to the dpa, they warned that the price adjustment could not be enforced against customers with contracts without the possibility of adjustment until October 1st. This affects an average of around 25 percent of household customers. In the case of fixed-price contracts, there is a risk of total failure if the allocation cannot be contractually passed on. “This creates significant liquidity problems for the energy suppliers, which can also lead to insolvency due to the already tense financial situation.”

On Thursday evening, the cabinet had agreed on the gas levy, which will lead to price increases for gas customers from autumn. Habeck said that the federal government’s decision for the temporary levy will and must be accompanied by further relief for the citizens.

Allocation to help gas suppliers

With the surcharge, the federal government wants to prevent importers from collapsing as a result of severely curtailed Russian gas supplies. It should take effect from the beginning of October and benefit gas suppliers such as Uniper, who have to buy replacements for the missing, cheaper gas volumes from Russia at high prices. So far, however, you cannot pass on these additional costs; this is to be done via the levy. Uniper was in financial turmoil, the federal government had decided on a billion-euro rescue package.

The ordinance is expected to come into force in mid-August. It is unclear how high the levy is and when exactly it will reach consumers. The amount of the surcharge is to be determined for the first time by August 15, 2022. According to the draft ordinance, the amount depends largely on the volume and price of the gas to be procured as a replacement and on demand. Habeck had mentioned a range of 1.5 to 5 cents per kilowatt hour.