Development over the last 15 years
For many households and businesses in Germany, the price of gas is a decisive factor in their energy expenditure. Around 46 % of all central heating systems run on gas, and natural gas accounts for around 26.6 % of primary energy consumption in Germany. But how has the price of gas changed over the past 15 years and what are the factors influencing it?
The gas price consists of various components that can change over time. The largest components are the cost of energy procurement, taxes and levies, and the network charge. Energy procurement costs depend on the world market price for natural gas, which is determined by supply and demand, but also by political events, exchange rates and weather conditions. Taxes and levies include the natural gas tax, the concession levy, the sales tax and, since 2021, the CO2 tax introduced as part of the Climate Protection Act. The network charge is the price charged by gas network operators for the use of their infrastructure. It is monitored by the Federal Network Agency and can vary by region.
From 2014 to 2016, the price of gas fell significantly to around 5 cents per kilowatt hour as the supply of natural gas on the world market outstripped demand growth. This was partly due to rising production of shale gas in the USA, the expansion of liquefied natural gas (LNG) infrastructure, and lower consumption in Europe due to milder temperatures and higher energy efficiency.
Since 2017, the price of gas has risen again, mainly due to higher demand in Asia, especially in China, where natural gas is produced as a cleaner alternative to coal. In addition, geopolitical tensions between Russia and Ukraine and between the U.S. and Iran have led to uncertainties in the gas market. The CO2 tax, which has been levied since 2021, has also contributed to an increase in the price of gas. It currently stands at 25 euros per ton of CO2 and is set to rise to 55 euros per ton by 2025.
According to the online consumer portal Verivox, in 2020 the gas price for German private consumers consuming 20,000 kilowatt hours of gas was 1,212 euros. This corresponds to a price of about 6 cents per kilowatt hour. According to the source, the price of gas has increased by about eight percent since 2005 to date. However, there were also sharp fluctuations during this period, mainly due to changes in energy procurement costs.
A further increase in the price of gas is expected in 2023, which, according to Verivox, could lead to an additional annual burden of around 300 euros for a consumption of 20,000 kilowatt hours. However, the German government has adopted a so-called gas price brake to limit the increase in gas prices for private households. Under the gas price brake, gas suppliers are allowed to pass on a portion of the CO2 tax to their customers, but no more than 0.52 cents per kilowatt hour. This is intended to stabilize the gas price at around 12 cents per kilowatt hour.