German gas industry attacks tax rise proposal
Date: 17-Oct-02
Country: GERMANY
News emerged out of the Social Democrat/Green coalition talks earlier this week that the gas tax might be raised from 0.35 euros per kilowatt hour (kWh) to the current level of light heating oil at 0.56 euros/kWh as from 2003.
"This turns previous political guidelines upside down," the president of gas distributor lobby BGW, Manfred Scholle, said in a written statement issued late this week.
"(The planned tax hikes) will be to the detriment of consumers, the environment and the competitiveness of gas" he said.
News of the plans were still vague as the government, re-elected on September 22, aims to raise finance for its spending plans via new taxes, subsidy cuts and the end of some industry exemptions from "eco taxes" on fuel and electricity.
But the gas industry said it would suffer badly from the additional tax which analysts have estimated will cost it an extra two billion euros ($1.97 billion) a year if the present government plans go ahead.
"The planned tax would distort international competition in gas as gas is taxed more favourably in other comparable large western European markets," a spokeswoman for leading distributor Ruhrgas said.
"It would also disadvantage gas in power generation, since rival energies heavy heating oil and coal are (respectively) taxed lower, or not at all," she said.
Gas-fired power plants accounted for nine percent of total German power production of 534 billion kWh in 2001 while coal accounted for half of the total, according to official figures.
Both BGW and Ruhrgas also said the plans ran counter to the government's climate protection strategy which it already has to reconcile with a scheme to exit nuclear power, which produces virtually no damaging greenhouse gases emissions.
Gas had up to now been favoured as an energy of low emissions, especially in new home heating systems.
Of the 83.6 billion cubic metres consumed in Germany in 2001, 49 percent went to end consumers and households, 25 percent to the industry, 12 percent into power generation plants and the remaining 14 percent into district heating and the gas industry's internal systems, Ruhrgas figures showed.
