German government war tax: Gas consumers will face huge cost hikes

Millions of households in Germany that meet their energy needs mainly with natural gas are facing huge cost increases.

On Monday, Trading Hub Europe, a joint venture of gas transmission system operators, set the amount of the state gas surcharge, which the German government decided at the end of July. It is 2.419 euro cents per kilowatt hour and must be paid by all private and commercial end consumers from 1 October.

Construction of the NEL gas pipeline in Mecklenburg-Western Pomerania, which was to transport gas from Nord Stream 2 [Photo by Niteshift (talk) / CC BY-SA 3.0] [Photo by Niteshift (talk) / CC BY-SA 3.0]

The gas surcharge is a kind of war tax that the Minister of Economy Robert Habeck (Greens) uses to pass on to the population the costs of the war in Ukraine, which the German government feeds without concession.

Sanctions against Russia and the refusal of the German government to commission the completed Nord Stream 2 gas pipeline have led to a shortage of natural gas supply and an explosion in international prices. Imported natural gas was 236% more expensive in May 2022 than a year earlier. Thanks to the revenue from the surcharge, gas suppliers are reimbursed for the difference between the previous low Russian prices and the currently high prices on the world market. These billions end up in the coffers of the big energy companies, which are making record profits as a result.

Despite this, the government strictly refuses to touch it. It even rejects such a modest measure as a windfall tax, which would take away some of the superprofits, and shifts the entire burden of the self-created energy crisis onto the backs of workers. It is significant that Trading Hub Europe, a private company closely linked to energy companies, can decide on the level of the gas surcharge, which it sets every three months.

With a gas surcharge of 2.419 euro cents per kilowatt hour, a household with an annual consumption of 20,000 kilowatt hours will incur additional costs of approximately €484 per year plus 19% VAT (sales tax), although this has not yet been clarified. The costs can vary greatly depending on the service provider, the contract and the thermal insulation of the accommodation. What is certain, however, is that even the smallest households will have to shell out several hundred euros more.

The gas surcharge, which comes on top of price increases from gas suppliers, is only a fraction of the cost explosion. Even before it came into force, prices had increased massively. According to the comparison portal Verivox, in July 2022, a kilowatt hour, including taxes and levies, cost on average around 16 euro cents. This is more than double than in previous years, when the final price was well below 8 euro cents.

The increase is even more drastic for new customers. Here, the price for an annual consumption of 20,000 kWh was 17.84 euro cents in August 2022. This is more than three times higher than two years ago, when the kilowatt hour still cost 5.46 euro cents euro.

And the price hike is far from over. “Imported natural gas was 235.6% more expensive in May 2022 than a year earlier,” writes the Federal Statistical Office. “For private consumption, the big increases in natural gas prices have not yet fully arrived.”

The drastic increases for private households are illustrated by the example of the Cologne gas supplier RheinEnergie, which more than doubled the energy prices for its customers on October 1. Instead of 7.87 euro cents, they will have to pay 18.30 euro cents for one kWh in the future, an increase of 10.43 euro cents.

RheinEnergie does not increase the basic price, which is included in the final cost. Nevertheless, from October 1, households will have to pay more than twice as much as before for their gas bill, according to the company’s own calculations. For a small apartment with an annual consumption of 10,000 kWh, the annual charges will drop from €960 to €2,002; for a large apartment or a small detached house with an annual consumption of 15,000 kWh, the costs will rise from €1,353 to €2,918 per year. That is a monthly additional cost of €130. Those who buy district heating from RheinEnergie will also have to pay 73% more from October 1.

The gas supplement is not even included in the announced price increases. For an annual consumption of 15,000 kWh, this amounts to an additional €363. The same goes for the CO2 tax. This had already driven up prices when it was introduced in January 2021 and is expected to rise from €30 to €55 per tonne by 2025. As a result, the gas bill for a household consuming 20,000 kWh will increase by 264 additional €.

Since more than 41% of Germany’s residential energy needs – heating, hot water, cooking, electrical appliances – are met by natural gas, millions of families are affected by the price explosion. Experts assume that the official inflation rate will exceed 10% due to the increase in gasoline prices.

The standard of living of large sections of the population, the result of decades of struggle, will thus be destroyed in a very short time. Unions, in cahoots with government and corporations, agree to long-term wage deals that don’t even cover a fraction of inflation.

Many are not ready to accept this. The government, politicians and the media are therefore speculating on a “hot autumn” and preparing to cripple and suppress resistance.

Left Party politician Sören Pellmann even calls for “new demonstrations on Monday in the East like the one against Hartz IV [welfare cuts] at the time.’ What a farce! The Left Party supports social cuts, including Hartz IV, wherever it has been and is in government. The Monday protests against Hartz IV failed because they were stifled by Die Linke and because they limited themselves to appeals to a government that was not subject to appeals.

The destruction of living standards by rising prices is unacceptable, as are the dismantling of countless industrial jobs, the untenable conditions in schools, nurseries and hospitals, and the policy of “profit before life” in the pandemic . But the fight against it requires two things.

First, it must be conducted independently of the Social Democrats (SPD), the Greens, the Left Party and the trade unions, all of which defend the capitalist profit system and the imperialist proxy war in Ukraine. Independent grassroots action committees should be set up in neighborhoods and workplaces to organize resistance to rising prices and network nationally and internationally. The Sozialistische Gleichheitspartei (Socialist Equality Party) and its international sister parties created the International Alliance of Base Committee Workers to facilitate and promote this.

Second, tackling the consequences of inflation requires a clear political perspective. It is inseparable from the struggle against the bankrupt capitalist system, which has nothing left to offer the vast majority of the population except poverty, decline, environmental destruction and war.

The government’s call to “make sacrifices” for the war in Ukraine must be categorically rejected. The claim that NATO is responding to an unprovoked attack by Russia in Ukraine and defending freedom and democracy is false. The war against Russia is a continuation of the wars against Afghanistan, Iraq, Libya and other countries through which the United States and its NATO allies have sought to defend their global dominance.

The German government is using the war in Ukraine to frantically rearm itself and become the strongest military power in Europe. He is using it as an opportunity to “further strengthen the European pillar of NATO, and for the long term,” as Green Foreign Minister Annalena Baerbock recently said in a keynote address. The Russian invasion of Ukraine is reactionary and must be rejected, but settling scores with Putin’s regime is the task of the Russian and international working class, not the German and American imperialists, who have cast their greedy eyes on the mineral resources and vast territory of Russia.

About Keith Tatum

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