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Gas prices to fall soon as Germany hits storage targets, says minister

·1-min read
FILE PHOTO: German Economy and Climate Action Minister Robert Habeck at a news conference in Berlin, Germany

BERLIN (Reuters) - German Economy Minister Robert Habeck expects gas prices to fall soon as Germany is making progress on its storage targets and won't have to pay the high asking prices currently commanding the market, he said on Monday.

"As a result, the markets will calm and go down," he said, adding that they had shot up recently due to high demand as well as market speculation, which could not be sustained long term.

Germany's gas storage facilities are nearly 83% full and will hit 85% full in early September, Habeck said at an energy event in Hamburg. Germany has set a goal for gas storage levels to be 85% filled by Oct. 1 and 95% filled by Nov. 1.

Habeck also reiterated that Germany will not allow a Lehman Brothers-style collapse to happen to its gas market.

"I promise on behalf of the German government that we will always ensure liquidity for all energy companies, that we don't have a Lehman Brothers effect on the market," said Habeck, referring to the U.S. investment bank's collapse, which helped trigger the 2008 financial crisis.

Germany will impose a gas levy on consumers from Oct. 1 through to March 2024 as part of measures to ensure utility companies remain liquid enough to maintain an intact gas market.

Uniper, Germany's largest importer of Russian gas, needed a 15 billion euro ($14.93 billion) government bailout last month after Russia drastically cut flows, forcing Germany to buy gas elsewhere at much higher prices.

The German government has warned that utilities risk a similar collapse to that of Lehman Brothers, due to soaring energy prices.

($1 = 1.0048 euros)

(Reporting by Miranda Murray and Christian Kraemer; Editing by Paul Carrel and Susan Fenton)