High cost to consumers
Energy prices fuel inflation: This is how the EU wants to ease the burden on households
Consumers can afford less and less with their money. The high energy prices are to blame.
© Arne Immanuel Bänsch / Picture Alliance
It is the year of records: For the first time in 28 years, inflation has risen to over four percent and gasoline prices are skyrocketing. It is the consumers who suffer. The EU has tried to find a solution.
Households are increasingly burdened by higher energy prices. Inflation in Germany passed the four percent mark for the first time in almost 28 years. Diesel and Super E10 hit nine-year highs. In the opinion of the EU Commission, households and companies should be protected as quickly as possible. The federal government still in office is not planning any additional measures, but referred to the next government. An overview:
Inflation rises
Fueled above all by higher energy costs, consumer prices rose by 4.1 percent in September compared to the same month last year, as the Federal Statistical Office announced on Wednesday. The Wiesbaden authority confirmed preliminary data. A four before the decimal point was last determined in December 1993. Higher inflation weakens the purchasing power of consumers. You can buy for one euro less than before.
For some time now, inflation has been fueled by energy prices. Global demand for crude oil, among other things, is high in view of the economic recovery after the collapse of the Corona crisis. In Germany, since the beginning of the year, 25 euros per tonne of carbon dioxide that is created when diesel, gasoline, heating oil and natural gas are burned have been due. In addition, there are special effects such as the withdrawal of the temporary VAT cut in the second half of 2020, which is now fully reflected in inflation. Many economists believe that inflation is likely to weaken again in the course of the coming year.
EU toolbox
EU Energy Commissioner Kadri Simson presented a so-called “toolbox” with tools that EU countries can use without violating European competition rules. Among other things, the Commission proposes direct payments, tax breaks and subsidies for small businesses. But it is also considering medium-term reforms to make the European energy market more robust in the long term. The Brussels authority also wants to take a closer look at a proposal for joint gas purchases and gas reserves. The federal government is reluctant. In Germany, gas is not bought by the state, said government spokesman Steffen Seibert in Berlin.
Several EU member states have intervened at short notice to protect private households from high electricity and heating bills. The incumbent federal government is not planning any additional government measures against rising energy prices, as Seibert said. He could not announce such measures that would affect the next government. The German Tenants’ Association and the Federal Association of Consumers demanded countermeasures from the new federal government. Otherwise there is a risk of an “additional costs explosion” in the coming years, warned the two associations.
Refueling more expensive
Diesel and Super E10 reached nine-year highs, as the ADAC announced on Wednesday. Only in the record year 2012 was fuel a few cents more expensive, but the gaps are shrinking noticeably. Diesel in particular increased: On Tuesday, according to ADAC, fuel cost 1.526 euros per liter on a national daily average – 4.8 cents more than a week ago. This means that 2.8 cents are still missing from the all-time high from August 2012. E10 was also significantly more expensive. On Tuesday it was 1.647 euros per liter, 3.8 cents more expensive than a week ago. This means that 6.2 cents are missing from the all-time high from September 2012. According to the ADAC and the Mineral Oil Industry Association, the most important driver is crude oil prices, which were recently in the region of multi-year highs. In addition, both associations refer to the CO2 price.
Consequences of rising gas prices
Due to the enormous rise in gas prices, the energy supplier Eon temporarily stopped new business with private customers. “Unfortunately we cannot offer you any natural gas products at the moment,” read the energy company’s customer website on Wednesday. A company spokesman emphasized that existing customers are not affected. You would of course continue to be supplied. The group will also continue to fulfill its tasks as a basic supplier. The basic suppliers step in if other suppliers fail to ensure the gas supply to the households concerned.
In the past few months, the wholesale prices for gas have climbed to record highs internationally. The big gas suppliers buy in the long term, so that price jumps do not have a direct impact on the stock exchange. A spokeswoman for the Ministry of Economic Affairs emphasized that the security of supply in Germany was still high and that there were no bottlenecks in the gas supply. In view of the gas crisis in Europe, Russian President Vladimir Putin on Wednesday campaigned for the Nord Stream 2 Baltic Sea pipeline to go into operation quickly – and again denied allegations that Russia was using its market power to drive up prices.