SHARE
COPY LINK

OIL

Germans face massive gas price hike

German consumers may face a dramatic increase of up to 40 percent in gas prices this year due to recent rallies in the oil market, according to the environment ministry.

Germans face massive gas price hike
Photo: DPA

German gas consumers will have to brace themselves for much steeper prices than the recent hikes announced by energy firms, Germany’s Deputy Environment Minister Michael Müller warned in an interview on Sunday.

“Beyond the already known 25 percent, there may another increase in the gas price of up to 40 percent by autumn,” Müller told newspaper Welt am Sonntag.

Recent surges in the oil market to which gas is index-linked, and speculation in spot markets are to blame, he said. “Energy firms always hike prices for gas with a delay of several months,” Müller added.

Germany imports 80 percent of the gas it consumes and prices follow those of oil with a certain lag under long-term supply contracts. On Friday, oil prices shot up to new record high of $139 a barrel.

At the end of May, the Federal Association of Energy and Water Economy (BDEW) had warned consumers of a 20-percent rise in gas costs while magazine Der Spiegel reported that energy market leader E.ON Ruhrgas was planning to raise prices by up to 25 percent.

“We can expect that the era of cheap energy is over. The price will in all probability stay at its current high level,” BDEW President Michael Feist said.

Gas in continental Europe is index-linked to oil prices with a certain time lag, a fact Müller said was no longer realistic. “The German government, with the approval of the European Union, should seek to develop a strategy to decouple prices so that we can have a more reasonable price development that excludes huge increases,” he said.

Economists and politicians in Germany are increasingly worried about the impact of high energy prices on spending power and general economic growth. Müller is to accompany Environment Minister Sigmar Gabriel to Russia, Germany’s chief gas supplier, next week to discuss possible tie-ups in environment technology and raw materials.

BUSINESS

France’s EDF hails €10billion profit, despite huge UK nuclear charge

French energy giant EDF has unveiled net profit of €10billion and cut its massive debt by increasing nuclear production after problems forced some plants offline.

France's EDF hails €10billion profit, despite huge UK nuclear charge

EDF hailed an “exceptional” year after its loss of €17.9billion in 2022.

Sales slipped 2.6 percent to €139.7billion , but the group managed to slice debt by €10billion euros to €54.4billion.

EDF said however that it had booked a €12.9 billion depreciation linked to difficulties at its Hinkley Point nuclear plant in Britain.

The charge includes €11.2 billion for Hinkley Point assets and €1.7billion at its British subsidiary, EDF Energy, the group explained.

EDF announced last month a fresh delay and additional costs for the giant project hit by repeated cost overruns.

“The year was marked by many events, in particular by the recovery of production and the company’s mobilisation around production recovery,” CEO Luc Remont told reporters.

EDF put its strong showing down to a strong operational performance, notably a significant increase in nuclear generation in France at a time of historically high prices.

That followed a drop in nuclear output in France in 2022. The group had to deal with stress corrosion problems at some reactors while also facing government orders to limit price rises.

The French reactors last year produced around 320.4 TWh, in the upper range of expectations.

Nuclear production had slid back in 2022 to 279 TWh, its lowest level in three decades, because of the corrosion problems and maintenance changes after
the Covid-19 pandemic.

Hinkley Point C is one of a small number of European Pressurised Reactors (EPRs) worldwide, an EDF-led design that has been plagued by cost overruns
running into billions of euros and years of construction delays.

SHOW COMMENTS