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ENERGY

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

German Economy Minister Robert Habeck said on Wednesday that a gradual EU ban on Russian oil imports could lead to supply "disruptions" and price increases but backed the measure as necessary step to sanction Moscow.

Robert Habeck, Germany's Economy and Climate Minister speaks at a press conference on Wednesday.
Robert Habeck, Germany's Economy and Climate Minister speaks at a press conference on Wednesday. Photo: picture alliance/dpa/dpa Pool | Kay Nietfeld

“I have said a few times that we can of course not guarantee in this situation that there won’t be disruptions, primarily regional disruptions,” he told reporters after a cabinet meeting.

He stressed, however, that Berlin backed the bloc’s measure as a response to the Ukraine invasion.

Habeck, whose brief also includes energy policy, cited specifically the PCK refinery in the eastern town of Schwedt as one that could feel the impact.

READ ALSO: Germany supports Russian oil embargo, says minister

It supplies around 90 percent of the oil consumed in Berlin and the surrounding region, including Berlin-Brandenburg international airport.

Russian oil giant Rosneft, controlled by the Kremlin, is a majority shareholder in the site — a complicated situation Habeck said would have to be “resolved politically”.

Habeck noted that the gradual implementation of the ban should help cushion shocks to oil markets.

“It is possible they have already been priced in,” he said.

“But of course prices could also significantly rise.”

The European Union’s executive unveiled on Wednesday plans for a gradual ban on Russian oil imports as part of a raft of new sanctions to punish Moscow for invading Ukraine.

If approved, the oil ban would be the EU’s toughest move yet against Russia’s strategic energy sector that helps the Kremlin finance its war, but will still not touch its huge gas exports.

The embargo is part of the bloc’s sixth sanction package, and would be phased-in over the rest of the year to help countries adapt.

Germany has ruled out an immediate embargo on all Russian energy, especially gas. But it aims to end Russian oil imports by the end of this year.

READ ALSO:  ANALYSIS: How badly would a Russian gas embargo hurt ordinary Germans?

Russian supplies now make up 12 percent of Germany’s oil imports compared to 35 percent previously, according to data provided by the economy ministry on Sunday.

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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.

READ ALSO: 

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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