How Germany plans to pay people’s gas bills in December?
The German government has agreed to pay for homes and certain companies’ December gas bills as part of a phased relief program. But how much money and how soon? What you should know is as follows.
A solution has been decided upon by an expert group. That has been charged by the German government with carrying out plans for a gas price cap. They suggest that the state pays for residential and commercial gas bills in December before the price cap takes effect in the first quarter of 2023.
Plans of the German Government
The Federal Ministry of Economics declared on Monday morning(7/11/22), just before the recommendations were made public in Berlin. That the Expert Commission on Gas and Heat had “drawn a series of recommendations for the federal government and passed them unanimously“. After approximately 35 hours of discussion.
A two-step strategy is recommended by the commission of experts to assist consumers with their electricity costs during winter. In December of this year, the government will act to pay for people’s gas bill advance payments as the first stage.
The federal government would “partially compensate” consumers for the high bills. They might anticipate in January and February 2023 by paying energy firms back for the lost revenue by waiving the billing amount for December. In essence, it implies that the government will step in for one month and pay people’s gas payments. According to the commission, this action would ease consumers. While the government set up the conditions for a price restriction, which is more challenging to implement.
From March 2023, a gas price cap may be imposed on 80% of bills.
The price cap, which is the second step of the suggestion, would thus start in March and involve a price cap on a percentage of people’s gas bills. Additionally, a hardship fund would be specifically for low-income families and individuals.
In order to encourage households to reduce their gas consumption. The commission proposes capping the price of gas at 12 cents kilowatt/hour for the so-called “basic quantity” of gas, or around 80% of a household’s typical consumption.
The government currently maintains the price cap and special payments.
The federal government might spend more than 90 billion euros on the package, which would be in effect until the spring of 2024. It is a key component of the most recent 200 billion euro energy assistance package from the government.
The suggestions will now be formally delivered to the cabinet of Chancellor Olaf Scholz. Within the next 3 weeks, a final report is anticipated, which may include further recommendations. This is to determine whether to fully adopt the recommendations, do so in parts, or do nothing at all.
However, discussions between the federal government and federal state leaders are still continuing, with the latter insisting that the gas price ceiling should be implemented sooner to include the winter months. I’m hoping that this will help Germans who have gas bills due in December.