Energy price brakes end at the turn of the year: Financial experts see small additional costs

Energy price brakes end at the turn of the year: Financial experts see small additional costs

According to a report by www.sueddeutsche.de, the federal government is considering ending the energy price brakes at the turn of the year instead of only in April 2024. This is due to the lack of funds following the Federal Constitutional Court's ruling. An analysis by Verivox showed that the additional costs for consumers will be comparatively small. A model household that consumes 20,000 kilowatt hours of natural gas expects to spend 26 euros more per year, while electricity costs only one euro more.

The prices for natural gas and electricity on the stock exchanges have been significantly lower for several months than in 2022 and the beginning of 2023. This was not immediately reflected among consumers, as suppliers buy in the long term and do not immediately pass on the cheaper stock exchange prices. Nevertheless, many companies have now reduced their prices or are planning to offer cheaper tariffs at the end of the year, which are often below the price cap limits.

According to Verivox, around 120 basic suppliers nationwide have announced price reductions for both gas and electricity. Basic suppliers are the energy companies that have the most customers in a region. Consumers with older contracts should therefore consider switching to a new tariff to benefit from the lower prices.

However, the federal government plans to increase the VAT on natural gas again from March 2024 after it was temporarily reduced to support consumers. Check24 has calculated that this results in additional expenses of 224 euros per year for a sample household.

Overall, it is expected that the end of energy price caps and the increase in VAT on natural gas will burden consumers with additional costs. However, the lower prices on the stock exchanges and the announced price cuts can partially cushion the increase. Consumers should therefore review their tariffs and, if necessary, switch to cheaper providers in order to minimize the impact on their household budgets.