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Energy crisis - Appeal for higher prices for gas and electricity: It must hurt now

2022-07-27T08:19:38.477Z


Advice is no longer enough to save the country from the gas emergency: Energy prices must rise so that there are incentives to save. And the citizens should find out what exactly awaits them.


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Photo: Christian Ohde / IMAGO

"Never let the old principle rust: It has to a) hurt, b) cost something." Originally referred to by the poet Eugen Roth as referring to a successful visit to the doctor, in the current gas crisis we seem to be heading towards that principle.

The government's appeals to reduce gas consumption are not working.

There's as much hot water running through the showerheads as ever.

And in the hardware store, there is a shortage of radiators – which, in case of doubt, are then also operated with electricity from gas-fired power plants in the fall.

So does it just mean waiting until the bill comes on the table – and it gets really painful?



In order to protect Germany's society and economy from the gas emergency, clear communication is needed as to why it is important to save every kilowatt hour right now.

And most importantly, what happens if we don't.

Well-intentioned advice is not enough.

If politicians do not ensure that consumers are transparently informed by gas suppliers about forthcoming costs, they will let them run into the open knife.

Gas prices could triple for private households

About 40 percent of the almost 41 million private households in Germany heat with gas.

Due to the increase in world market prices for natural gas in the course of the Ukraine war, the burden on these will soon increase rapidly - price increases by a factor of three are under discussion.

If the gas stays off for a longer time, it can go even higher.

An example: A four-person household in an apartment building consumes an average of 15,000 kWh per year.

The bill would thus increase from around 1100 euros to 2500 euros (2022) and even further to 3200 euros or more (2023) based on the annual average for 2021.

The decisive factor here is the individual contract.

Many households have gas supply contracts with fixed installments.

This means that the discussed cost increases are abstract for most people.

So if the deduction was determined on the basis of the previous year, there is a risk of back payments in the sometimes four-digit range at the end of the accounting period.

The example household mentioned above would have to pay 1000 to 2100 euros in arrears if its deduction was previously around 92 euros.

So households that have longer-term fixed-price contracts with their gas suppliers are better off?

That could turn out to be a fallacy.

In this case, the energy supplier bears the higher costs if he has to procure the gas himself at higher prices.

In most cases, however, these contracts have a term of no more than two years.

However, should the Ministry of Economics announce the third stage of the gas emergency plan soon, this will give the gas suppliers the opportunity to quickly terminate those contracts with fixed prices.

Making decisions before making one

The problem in both cases: Consumers are not receiving a concrete price signal at the moment and probably will not be in the coming months when the heating season begins.

So it's no wonder that households' efforts to save are less than they could be.

There is a lack of transparency to make an informed decision.

The costs are not yet noticeable and who likes to change their habits without a good reason?

Especially when these habits are not only supposedly harmless, but represent a basic need.

As a result, potential savings are not fully exploited and the overall economic costs of gas supply are higher than they should be.

The consequences are all the more painful: many households will simply not be able to afford the high additional payments.

They have to be cushioned with transfer payments.

There are (partial) payment defaults, in the worst case personal bankruptcies can be expected.

Social explosive included.

These defaults, in turn, weigh on the (already strained) balance sheets of gas utilities.

In the case of municipal utilities, this has a negative impact on municipal budgets.

Public bailouts by gas suppliers that are in trouble (see Uniper ) could also become more frequent.

Last but not least, a gas shortage would hit industry in particular.

The lower demand from private households for other goods is an additional burden on the economy as a whole.

Consumers now need to know what to expect

In order to mitigate these problems, which are so clearly foreseeable today, the government should oblige gas suppliers and landlords to send households a notification according to the current market situation on a regular basis, for example every three months at present.

Similar to the annual pension information, it is important to show the core information transparently: the current amount of the advance payments and the foreseeable amount of the monthly costs if the current gas price is updated.

Above all, however, concrete tips for potential savings, valued in euros.

For example, lowering the room temperature by 1 degree brings 10 euros a month.

If legally possible, the advance payments should also be adjusted during the year with the aim of keeping the additional payment as low as possible.

Customers with price maintenance must at least be informed about the risk that their contract could be terminated if there is a gas shortage.

Rational decisions can only be made based on data.

This data must now be made available to private households.

And then the great philosopher and enlightener Voltaire will once again be right: "You can bring people to reason by enticing them to think for themselves."

Source: spiegel

All business articles on 2022-07-27

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