Gas commission chaired by Prof. Grimm has forwarded action plan to government
The government’s expert commission chaired by Prof. Dr. Veronika Grimm has agreed on specific proposals. The first step involves the reimbursement of the monthly installment for December. A gas price cap could then be introduced from March 2023.
The expert commission has proposed a two-step action plan aimed at alleviating the repercussions of rocketing gas prices. When presenting its interim report, the commission announced that the first step involves the state paying the installments for gas and district heating customers in December this year. The second step will see a gas and heating price cap introduced from early March 2023 until at least the end of April 2024. The state guarantees a gross price including all pricing components added by the state of 12 cents per kilowatt hour for a basic quantity of gas. Market prices will apply for anything consumed over and above this contingent.
“I believe that the commission has come up with a good and feasible proposal,” says the Chair of the committee, Prof. Dr. Veronika Grimm, who is also a member of the German government’s Council of Economic Experts that monitors macroeconomic developments. A rapid response is necessary to cushion the “massive burden”, she continues. That is why the commission decided on the two-step approach.
The gas price cap is to be introduced for industry from January 2023. The proposed measures will reduce the burden by approximately 96 billion euros. The proposal states that industry should pay a fixed price of 7 cents per kWh for 70 percent of their consumption from 2021, and the market price for everything over and above that.
The measures are aimed at alleviating the burden but also at providing an incentive to save on gas and heating. For private households and SMEs the relief package would come to a total of approximately 71 billion euros and for industry to 25 billion for the period until April 2024.