Germany Raises Gas Storage Levy Amid Political Standstill

(Bloomberg) -- Germany’s natural-gas market manager said it will raise a storage fee that may make it more expensive for central European countries to obtain fuel unless parliament passes a law in time to scrap it.

The fee — which is used to cover the costs of refilling storage sites — will rise to €2.99 ($3.16) a megawatt-hour from Jan. 1, Trading Hub Europe said. Berlin was trying to pass a law to abolish the levy at cross-border points next year after neighboring countries said it made shifting away from Russian gas more costly, but those efforts have been complicated by the implosion of Germany’s ruling coalition.

THE said calculations for the fee excluded cross-border interconnection points, “assuming that the legislative process is implemented” with effect from Jan. 1. But if Germany’s minority coalition doesn’t manage to pass a law to scrap the charge, THE said it will continue to levy it at those points. The level of the charge wouldn’t be recalculated, it added.

A spokesperson for the German economy ministry said abolishing the fee is an urgent legislative proposal that should be passed by the current Bundestag if possible. 

Germany introduced the charge at the peak of Europe’s energy crisis in 2022 after Moscow curbed its pipeline gas flows and Berlin had to spend billions of euros to fill its storage facilities. It’s paid by traders or utilities for deliveries through Germany, and has been heavily criticized as it raises the cost of obtaining liquefied natural gas for countries such as Austria, Slovakia and the Czech Republic.

So far, the total cost of moving gas from Germany to neighboring countries was as much as €3.50 per megawatt-hour, and would become more expensive if the surcharge remains in place. The transit fee consists of an exit fee and the storage fee. The storage fee rose to €2.50 per megawatt-hour for the second half of 2024.

THE, which administers the fee in accordance with legal requirements, previously said it had until Nov. 20 to publish the new levy. The next gas storage fee will be set on July 1, it said.

It added that the law abolishing the fee may also enter into force retroactively, and that settlement of the charge won’t take place until the end of March, by which time there should be clarity on the issue.

(Updates with additonal details and context in fifth and eighth paragraphs.)

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