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ENERGY

Germany takes temporary control of Gazprom subsidiary

Germany said Monday it was temporarily taking control of Russian gas giant Gazprom's German subsidiary to secure energy supply and critical infrastructure amid growing distrust between the trade partners in the wake of the Ukraine war.

Economy and Climate Minister Robert Habeck speaks at a press conference in Berlin on Monday.
Economy and Climate Minister Robert Habeck speaks at a press conference in Berlin on Monday. Photo: picture alliance/dpa | Michael Kappeler

Energy Minister Robert Habeck said the Bundesnetzagentur energy regulator would become the trustee of Gazprom Germania until September 30th.

“The government is doing what is necessary to ensure security of supplies in Germany, and that includes not exposing energy infrastructures in Germany to arbitrary decisions by the Kremlin,” Habeck said.

The move comes after state-owned Gazprom unexpectedly said it was withdrawing from Gazprom Germania last Friday, without disclosing a new ownership structure.

The German unit holds several key energy assets, including natural gas supplier Wingas, which has a market share of around 20 percent in Germany, gas storage firm Astora, a London-based trading arm and other foreign subsidiaries.

The German government made the decision to step in because of the current “unclear” legal structure behind Gazprom Germania and the mother firm’s failure to comply with the obligation to inform German authorities of ownership changes, the minister said.

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Under German law, the government has the right to examine transactions involving non-EU firms deemed systemically relevant.

Habeck said Gazprom Germania operates “critical infrastructure” in Europe’s biggest economy.

Under the interim arrangement, voting rights in Gazprom Germania will be transferred to the Bundesnetzagentur.

The energy regulator will also be allowed to dismiss management members and appoint new ones, as well as “take all necessary measures to guarantee supplies”, Habeck said.

Germany has backed sweeping Western sanctions against Moscow over its invasion of Ukraine.

But because of its heavy reliance on Russian energy imports, Berlin has so far resisted pressure to boycott Russian oil and gas.

Those calls have grown louder at home and abroad however following recent allegations of atrocities committed against civilians in the Ukrainian town of Bucha.

EU antitrust investigators last week raided the German offices of Gazprom, on suspicion the Russian state gas giant had illegally pushed up prices in Europe.

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ENERGY

Should tenants in Germany be shielded from energy price hikes?

Gas prices have more than tripled in the past year, prompting tenants' rights advocates to call for more social support and a cap on energy costs.

Should tenants in Germany be shielded from energy price hikes?

The German’s Tenants’ Association is calling on the government to put together a new energy relief package to help renters deal with spiralling energy costs.

Gas has become an increasing scarce resource in Germany, with the Economics Ministry raising the alert level recently after Russia docked supplies by 60 percent.

The continued supply issues have caused prices to skyrocket. According to the German import prices published on Thursday, natural gas was three times as expensive in May 2022 as it was in May a year ago.

In light of the exploding prices, the German Tenants’ Association is putting the government under pressure to offer greater relief for renters.

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Proposals on the table include a moratorium on terminating tenancy agreements and a permanent heating cost subsidy for all low-income households.

The Tenants’ Association has argued that nobody should face eviction for being unable to cope with soaring bills and is urging the government to adjust housing benefits in line with the higher prices. 

Gas price cap

Renters’ advocates have also joined a chorus of people advocating for a cap on consumer gas prices to prevent costs from rising indefinitely.

Recently, Frank Bsirske, a member of the parliamentary Green Party and former head of the trade union Verdi, spoke out in favour of capping prices. Bavaria’s economics minister and Lower Saxony’s energy minister have also advocated for a gas price cap in the past. 

According to the tenants’ association, the vast majority of tenants use gas for heating and are directly affected by recent price increases.

At the G7 summit in Bavaria this week, leaders of the developed nations discussed plans for a coordinated cut in oil prices to prevent Russia from reaping the rewards of the energy crisis. 

In an initiative spearheaded by the US, the group of rich nations agreed to task ministers will developing a proposal that would see consumer countries refusing to pay more than a set price for oil imports from Russia.

READ ALSO: Germany and G7 to ‘develop a price cap’ on Russian oil

A gas price cap would likely be carried out on a more national level, with the government regulating how much of their costs energy companies can pass onto consumers. 

Strict contract laws preventing sudden price hikes mean that tenants in Germany are unlikely to feel the full force of the rising gas prices this year

However, the Tenant’s Association pointed out that, if there is a significant reduction in gas imports, the Federal Network Agency could activate an emergency clause known as the price adjustment clause.

This would allow gas suppliers to pass on higher prices to their customers at short notice. 

The Tenants’ Association has warned that the consequences of an immediate market price adjustment, if it happens, should be legally regulated and socially cushioned.

In the case of the price adjustment clause being activated, the government would have to regulate the costs that companies were allowed to pass onto consumers to prevent social upheaval. 

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