What gas customers should know now

nIt’s also 99 days on Friday until the warm-up period begins in Germany on October 1. Then the demand for energy in apartments increases, half of which is heated by natural gas. But it is uncertain how long gas supplies will last: at least after reducing imports from Russia to 40 percent of the previous volume along the Baltic Sea Nord Stream 1 pipeline for a week at the latest, gas is now a scarce commodity. , as formulated by Federal Economy Minister Robert Habeck (Greens). What is certain is that prices have already risen sharply – and that large increases in tariffs will also sooner or later affect end customers.

When will there be price increases for end customers?

It depends on the purchasing strategy of the power provider in question, and therefore will vary from company to company. The rise in gas prices from last fall is now being overtaken, says Klaus Muller, president of the Federal Network Agency. That’s a 30, 50, or 80 percent increase.

But this should only be the beginning of the increments. Many municipal and other utilities have long-term supply contracts they made years ago at low prices. In this way, recent price jumps are mitigated. However, this will not do much if deliveries of Russian natural gas do not materialize, and then it will have to be purchased again at a significant cost. There is talk in the industry that providers will incur losses if the current delivery terms to end consumers remain in place. For this reason, much higher price increases can be expected for private customers in the coming months.

How quickly can providers demand higher rates?

For now, consumers are protected. Minister Habek announced the alert level in the gas emergency plan on Thursday due to stagnating Russian gas flows. “The prices are already high and we have to be ready for further increases,” the politician said. But now it remains to be seen when the rate-adjusting mechanism will be activated, through which utilities can pass higher prices directly.

To do this, the Federal Network Agency will have to determine a “significant decrease in the total volume of gas imports into Germany”, which has not yet happened. After that, affected energy suppliers will have the right “along the supply chain to adjust gas prices for their customers to an appropriate level.” This is regulated by the Energy Supply Security Act. Gas imports will continue to decline on July 11, when the maintenance of the Nord Stream 1 pipeline on the Baltic Sea was announced, which is why gas flows will be suspended for about two weeks. It is not clear whether this is sufficient for the network agency.

What does price guarantee mean then?

Anyone who has agreed to a price guarantee with their power supply has so far been protected from increases for the promised period. But if the price adjustment mechanism is activated, it won’t help: then the merchant and supplier can pass their purchase prices on within a week – even if the contract has low tariffs set for several months. Anyone who does not have a price guarantee is not yet safe from significant increases.

How much have gas prices gone up?

In previous years, the price of gas reached 20 euros per megawatt-hour on the TTF (Trading Exchange). Due to the increased demand in the last year, the demand for energy supplies suddenly increased all over the world, which actually led to higher prices. Russia’s aggressive war in Ukraine has also caused uncertainty. Recently, the trading price was around 80 euros per megawatt-hour, but after Nord Stream 1 was throttled a week ago, it rose to more than 120 euros. However, this is still less than in the early days of the Ukraine war, when the price was about 200 euros.

How much does gas consumption cost private families?

This depends on the respective consumption and the provider. New customer tariffs are often more expensive. An example of a household with gas consumption of 20,000 kWh per year paid an average of more than 13 cents per kWh in April, according to a calculation by the Federal Energy and Water Industries Association (BDEW). Double compared to previous years: Since 2008, the family rate has been about 6 to 7 cents per kilowatt-hour. Similarly, according to comparison portal Check24, a typical household with the same gas consumption pays an average of 13.8 cents per kWh in June, thus 2,752 euros per year. This represents an increase of 113 percent compared to the same month last year. Economist Jens Südekum expects gas costs to double or quadruple.

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