The rates for gas that residential customers pay include the costs for the acquisition and sale of the gas, the fees for using the gas network, and state-imposed price components. However, ‘state-imposed’ does not necessarily mean that these price components contribute towards the Federal Government’s budget. The state-imposed price components serve a wide range of different purposes and are levied in different ways.
1. Concession fee
Concession fees are paid by grid operators to municipalities for using municipal rights of way. The municipality and the grid operator enter into a formal agreement setting out the exact amount of the fees to be paid, with the maximum concession fee being specified in the Concession Fee Ordinance (KAV).
In accordance with Section 2 (2) of the Concession Fee Ordinance, the maximum concession fee that has to be paid for the supply of tariff customers is determined by the number of inhabitants of the municipalities and by what the gas is used for. If gas is used solely for cooking and hot water preparation, the maximum fee ranges from 0.51 ct/kWh for municipalities with up to 25,000 residents to as much as 0.93 ct/kWh for municipalities with more than 500,000 residents. If the gas is used for other purposes, the concession fees range from 0.22 ct/kWh for municipalities with up to 25,000 residents to as much as 0.40 ct/kWh for municipalities with more than 500,000 residents. According to the , residential customers had to pay an average concession fee of 0.25 ct/kWh. Pursuant to Section 2 (3) of the Concession Fee Ordinance, the maximum concession fee for special contract customers is 0.03 ct/kWh.
2. Energy tax (gas tax)
Between 1999 and 2003, as part of an environmental reform package, the tax rates for several energy products, including gas, were raised in the Mineral Oil Tax Act. One of the main goals of the reform package was to advance climate policy goals. By taxing fuel for transport and heating, it encouraged consumers to use less energy. At the same time, it reduced indirect labour costs by lowering and stabilising social security contributions. In 2006, the Mineral Oil Tax Act was replaced by the Energy Tax Act, which also contained a tax on coal.
The Energy Tax Act levies a tax on the consumption of natural gas as a heating fuel. This is a conventional excise tax that is effectively borne by the consumer.
The tax is levied on gas taken from the public network for consumption or on gas that is produced and used by the consumers themselves.
The tax is thus not collected directly from the consumer, but is collected from the producer or gas supplier farther upstream. This is considered to be a more efficient approach.
The energy tax (gas tax) on gas supplied to residential customers is currently 0.55 ct/kWh. The customs administration is responsible for collecting the energy tax, which accrues to the federal budget.
3. Value-Added Tax (VAT)
As set out in the German Value Added Tax Act, products and services supplied by businesses to customers are usually subject to value-added tax. The value-added tax is effectively borne by the consumer. VAT is paid by the supplying company, which has to pay the tax over to the tax office.
Art. 106 (3) of the Basic Law requires the Federal and Länder governments to share value-added tax revenue. The municipal governments have been entitled to a portion of this revenue since 1998 (Art. 106 (5a) of the Basic Law). The particulars are laid out in the Fiscal Equalisation Act.
Gas deliveries are subject to the regular VAT rate of 19%. The tax is levied on the total amount made up of production and sale, network fees and other state-imposed price components (e.g. energy tax).