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German government addresses spiralling energy prices

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FILE PHOTO: Flames from a gas burner on a cooker are pictured in a private home in Bad Honnef, near Bonn, Germany

FRANKFURT (Reuters) - German government departments are stepping up efforts to help consumers affected by runaway wholesale energy prices which are beginning to hurt low-income households, two policymakers told Reuters at the weekend.

Like many countries, Germany has seen historically high prices of energy and related European carbon emissions permits which were triggered by the lifting of COVID-19 restrictions and resulting demand on depleted gas stocks.

"We are working flat out on solutions for households that are now facing difficulties," said the general secretary of the centre-left Social Democratic Party (SPD), Kevin Kuehnert in remarks authorised for publication on Sunday.

"Our promise has always been that we will particularly protect people on a tight budget who find themselves suddenly caught out by social and global developments," he added.

The government would prefer "unbureaucratic and prudent" solutions tailored to individual needs, Kuehnert said.

The coalition government was sworn in last month under leadership of SPD chancellor Olaf Scholz, and also includes the pro-spending, environmentalist Greens and the fiscally more conservative, libertarian Free Democrats (FDP).

A newly installed Federal Ministry of Building has yet to deliver one-off heating support payments promised in the coalition agreement to help a few hundred thousands households receiving housing benefit.

Finance minister Christian Lindner of the FDP on Thursday promised to make relevant finance available.

Households depending entirely on income support (Hartz-IV)are paid their heating costs fully.

Half of German households heat with gas and a quarter with heating oil.

As for electricity and gas, the minister for environment and consumer protection, Steffi Lemke, told Reuters she would clamp down on suppliers who tried to profiteer from contract expiries, competitor insolvencies and people moving house.

New contracts for the latter group have doubled in price.

"Even if procurement costs rise, such horrific price increases are not justified," said Lemke.

(Reporting by Andreas Rinke and Vera Eckert, editing by Raissa Kasolowsky)

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