Germans Face ‘Enormous Wave’ of Energy Price Hikes, Uniper Says
German households and industries should brace for an “enormous wave” of higher energy prices that will begin to hit bills next year, utility Uniper SE warned.
(Bloomberg) — German households and industries should brace for an “enormous wave” of higher energy prices that will begin to hit bills next year, utility Uniper SE warned.
Most customers lock in prices for a year and aren’t yet feeling the impact of surging wholesale costs, according to Uniper Chief Executive Officer Klaus-Dieter Maubach. The gas giant on Friday sought a government bailout amid the energy crunch.
“An enormous increase will happen, it’s what German consumers must expect and it’s up to everyone of us now to do something about it,” he told reporters on Friday. The only way to avoid higher bills is to use less gas, he said.
Germany already faces joining a Europe-wide recession brought on by high energy costs, and the bleak outlook from Uniper signals there are no signs of that easing. Gas prices have surged as Russia cuts supplies to Europe along the Nord Stream pipeline, using energy as a weapon amid the fallout of its war against Ukraine.
German year-ahead power prices rose 19% this week and have almost tripled this year. Benchmark European gas costs have also surged.
German’s parliament passed legislation on Friday that puts in place a mechanism for companies to pass on the rising cost of purchasing gas to consumers even if they are already under contract. For now, the government says it has no plans to use the tool.
The figure per household of allowing these costs to be passed through to bills had been calculated at 25 euros ($25.40), but that figure is now likely to be higher, Maubach said.
The CEO said that the company’s financial situation is getting increasingly dire. Uniper may soon need to draw gas from storage to fulfill supply contracts. It may write to customers as soon as next week to warn of price increases, otherwise there’s a risk that Uniper will default on its obligations.