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ENERGY

Oil refinery workers caught in Germany’s energy dilemma

Germany is seeking to ban Russian oil by the end of this year over the war in Ukraine, but workers at the PCK oil refinery outside Berlin are less than happy about the plans.

PCK Oil Refinery Schwedt
Economics Minister Robert Habeck (Greens) gives a speech at the PCK oil refinery in Schwedt/Oder. Photo: picture alliance/dpa | Monika Skolimowska

“We need Russian oil. We have our houses, our families. If (the government) wants to stop it, then the area here will be dead,” Thorsten Scheer, 60, told AFP at the refinery in the town of Schwedt, on the border with Poland.

The plant, which employs 1,200 people, exclusively processes Russian crude oil from a branch of the Druzhba pipeline, the world’s longest oil pipeline.

It supplies around 90 percent of the oil consumed in Berlin and the surrounding region, including Berlin-Brandenburg airport, and many local businesses depend on the cash it brings to the area.

Economy Minister Robert Habeck travelled to Schwedt on Monday to hold a question-and-answer session with the refinery’s employees, where he met a mixed reception.

Standing on a table outside the staff canteen, Habeck sought to reassure the crowd of workers in green and orange overalls that the government would seek alternative ways to keep the plant running.

READ ALSO: Germany warns of possible ‘disruptions’ to oil supply with EU Russia ban

‘Not Germany’s concern’

But employees accused him of serving US interests in seeking to drive a wedge between Germany and Russia.

“Yes, war is rubbish. That is perfectly clear to us,” one worker told the crowd.

“But on the other hand, why should we suddenly ban a business partner who has delivered reliably for decades? We get a raw material and we process it. If this raw material is interrupted out of political correctness, that is not right in my eyes.”

Another worker, 48, who did not want to give his name, told AFP the situation was “stressful for everyone” as their jobs were “hanging in the balance”.

“In my opinion, the war is not Germany’s concern,” he said. “If (the oil embargo) would end the war, fine. But it won’t. Putin will peddle his oil somewhere else.”

Habeck, a member of the Green party, was also met with protests from environmental campaigners, who said they had managed to turn off the oil supply to the PCK plant in advance of his visit.

Germany has ruled out an immediate embargo on all Russian energy in response to the war in Ukraine, especially gas.

However, Europe’s biggest economy has already slashed its oil imports from Russia to 12 percent of the total from 35 percent before Russia’s invasion.

READ ALSO:

Sticky problem 

But the PCK refinery presents it with a sticky problem — especially since the site is majority owned by Russian oil giant Rosneft, controlled by the Kremlin.

In late 2021, Rosneft announced plans to increase its stake in the refinery from 54 to 92 percent by buying shares from Shell.

Germany’s Federal Cartel Office approved the transaction a few days before the outbreak of the war but the Economy Ministry is examining whether it can still be stopped.

PCK oil refinery Schwedt

View of the PCK Industrial Park which houses the PCK oil refinery, just outside Schwedt, some 110km north of Berlin. Photo: John MACDOUGALL / AFP

Habeck laid out three elements that would have to come together to keep the plant alive: new oil deliveries from other countries via ships arriving in the port of Rostock; financial aid from the government; and a new ownership structure to wrest control from Rosneft.

The minister said he was “well aware” that there was “a lot of uncertainty” for the workers.

READ ALSO: ANALYSIS: Just how quickly could Germany wean itself off Russian gas?

“I would be happy if you would see me not just as your enemy, but as someone who is really trying to save this site and keep it alive and lead it into the future,” he said.

But after the meeting, as the workers stood in line to help themselves to barbecued burgers and sausages, many remained unconvinced by his plans.

“It’s an experiment. We all just have to hope it works out,” said Steffen Thierbach, 64.

By Femke Colborne

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PRACTICAL TIPS

How German households can save on their electricity bills

Customers can save a high three-digit sum on their household electricity costs, according to calculations done by German price comparison portals. Here's why you may want to switch your tariff.

How German households can save on their electricity bills

German households are overpaying for electricity by billions of euros each year, according to calculations carried out on the Verivox price comparison portal.

This is because nearly a quarter of households in Germany purchase electricity via the most expensive tariff group from their local supplier – the so-called ‘basic supply’, or Grundversorgung in German.

But in Germany, customers have energy tariff options, and saving hundreds on your energy bill can sometimes be as simple as checking your current tariff online and switching to a cheaper one in a matter of minutes.

Based on approximately ten million households consuming electricity from the basic supply, Verivox calculates that Germans are overpaying by about €5.5 billion annually. That’s because the average difference between basic supply rates and the cheapest local energy rates currently amounts to 20 cents per kilowatt hour (kWh).

What is the ‘basic supply’ for household energy?

Household electricity in Germany is purchased through different tariffs (Stromtarifs). Through these various tariffs, local energy companies offer different prices for electricity, depending on customer contracts.

The basic supply tariff for electricity can be thought of as the default. When a new house is connected to the energy grid, for example, its electricity will be provided via the basic supply unless the homeowner chooses another tariff option.

READ ALSO: How to change electricity and gas providers in Germany

The basic supply is intended to ensure that everyone has access to electricity, even if they haven’t shopped around for an energy provider on their own. It can also be advantageous in the short term because it can be cancelled at any time, as opposed to other tariffs which typically come with longer contracts.

But the basic supply is comparatively expensive. According to Verivox, basic supply electricity currently goes for an average of 44.36 cents per kilowatt hour (kWh), whereas the cheapest available rates on average come to 24.7 cents/kWh across Germany.

How much can you save?

At current rates, you can expect to save about 44 percent on your electricity bill if you switch from basic supply to the cheapest option with a price guarantee. 

That amounts to significant savings, considering that annual electricity costs regularly come to a few thousand euros in German households.

The Hamburger Abendblatt reported that a three-person household consuming 4,000 kWh would save an average of €786.

These prices will vary from provider to provider and from region to region. 

Keep in mind that choosing other tariff options often comes with some additional fees. Still, in many cases taking a look at different electricity tariff options can save households some money.

Also, switching tariffs is different from switching your energy provider. If you currently get basic supply electricity from Vattenfall, for example, you could potentially switch to a different tariff option while maintaining your business with them. But if you are between contracts, or currently on basic supply, you could also consider switching providers.

In this case, a comparison portal like Check24 can be useful to get an idea of which companies offer the best rates.

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