The Limited Times

Now you can see non-English news...

Gas price limit: retailers and consumer advocates are demanding an EU upper limit

2022-07-01T09:21:24.461Z

Gas is expensive and in danger of becoming scarce. According to SPIEGEL information, representatives of business and consumers are now jointly demanding further relief - and new approaches to combating the price crisis.



Enlarge image

Expensive heat: Can the EU push through a price cap of 50 euros?

Photo: Hauke ​​Christian Dittrich / dpa

Many trading companies feel the same as their customers: the sharp rise in gas prices as a result of the Russian war of aggression in Ukraine is a threat to their existence.

The consumer advocates from the Federation of German Consumer Organizations (vzbv), who usually assess retail companies critically, have now teamed up with the German Retail Association (HDE).

In a paper that was previously available to SPIEGEL, they demanded further steps from politicians to relieve private households and retailers.

In her view, an EU-wide price limit for purchasing could play an important role in the fight against the gas price crisis.

Federal Economics Minister Robert Habeck had already presented comparable plans for the oil price.

A few weeks ago, the Green politician expressed the hope that it might be possible to enforce an upper limit against Russia if several buyers joined forces.

"The EU should use its strong market weight against gas-exporting countries and on the global spot markets for liquid gas," said vzbv board member Jutta Gurkmann.

"For example, it could aim to set a price limit of 50 euros per megawatt hour for gas imports." This could be implemented on the European gas exchange.

Advantage over tax-financed cap

The costs for gas end users in the EU could fall by a factor of 2.5 from the current 400 billion euros per year to 160 billion euros, argues the vzbv, citing calculations by the German Institute for Economics (DIW).

This would significantly reduce the gas bills of private households and companies.

Gurkmann said rising energy prices had triggered the biggest consumer crisis in decades.

"In this situation, politicians must be prepared to break new ground."

The state is not powerless, especially not in association with the other European states.

In a further step, an attempt should therefore be made to persuade other states such as Great Britain, Japan or China to join an upper limit.

Should it be possible to introduce an upper limit for gas prices, this would also have advantages over the classic price cap.

Both would be an extremely serious intervention in the market mechanism.

However, the state would not have to pay for the difference between the artificial cap and the market price.

However, such a step is not without risk.

In the worst case, suppliers below a certain price could refuse to deliver.

A danger that exists anyway, at least in the case of Russia.

Price cap for households

Accordingly, in the event of an embargo by Russia, vzbv and HDE also demand the introduction of a tax-financed price cap for private households and companies.

Spain and Portugal have already implemented this measure – and in Germany, too, economists like Sebastian Dullien, scientific director of the institute for macroeconomics and economic research (IMK), which is close to the trade unions, had called for a price cap for households.

Other demands by vzbv and HDE include relief packages for consumers, gas suppliers participating in the buffering of gas prices and other energy-saving measures.

apr/gt

Source: spiegel

All business articles on 2022-07-01

You may like

News/Politics 2022-05-18T08:39:16.904Z

Trends 24h

Business 2022-08-13T15:21:29.527Z

Latest

© Communities 2019 - Privacy