India's First International News Journal

India's First International News Journal

Monday, August, 8, 2022

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A special gas tax in Germany due to gas crisis in Europe

Such a scenario would put Germany, which imports about one-third of its gas from Russia, into serious economic problems, and would allow Moscow to punish Berlin for its support for Ukraine and Western sanctions, writes Politiko.

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The German government is considering the introduction of a special tax that could be used to distribute rising gas costs between customers and companies, as well as to save Uniper, the largest importer that depends on Russian gas.

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The proposal to introduce a special tax on the price of gas comes amid growing warnings that Russia could use routine maintenance of the Nord Stream 1 pipeline – which has been scheduled since July 11 and usually involves a short supply interruption – as an excuse to cut off gas supplies to Germany and Europe for a longer period.

Habeck’s ministry is preparing a draft regulation

Such a scenario would put Germany, which imports about one-third of its gas from Russia, into severe economic problems, and would allow Moscow to punish Berlin for its support of Ukraine and Western sanctions, writes Politico.

The president of the German Federal Network Agency, Klaus Miller, warned today of the risk of gas pipeline maintenance becoming “longer-term political maintenance”, which was previously discussed by the Minister of Economy and Climate, Robert Habeck, saying that a “complete blockade” of Russian gas was possible.

Also: German experts: Customs duties on Russian energy should be introduced

Habeck’s ministry is preparing a draft regulation that would enable the government to distribute gas costs through the application of taxes evenly.

The background is that only certain importers, such as Uniper from Dusseldorf, are heavily dependent on Russian gas and are now facing a sharp increase in costs, as they have to make up for reduced supplies at the last minute with expensive purchases on the global market.

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The envisaged system would seek to balance these rising prices by forcing all private consumers and companies to pay more special taxes, regardless of whether they use gas coming from Russia or from other suppliers, such as Norway.

The regulation should be before the parliament next week

Until now, regulations on consumer protection prohibited importers from passing on the increased costs of gas procurement to end consumers. But this means that Uniper, the largest German gas importer, risks extreme financial problems or even bankruptcy due to price disruptions on the global market.

Also: Israel and Egypt export gas to Europe

The regulation should be before the parliament next week, and a vote is expected before the summer break.

With a similar tax, Germany distributed the costs of switching to renewable energy sources between consumers and companies.

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Author

Muzaffar Ahmad Noori Bajwa
Muzaffar Ahmad Noori Bajwa
Counter-terrorism expert, research scholar and editor of The Eastern Herald.

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