German households feel the heat from rising power and gas bills

FRANKFURT (Reuters) - Some 4.2 million German households will see their electricity bills rise by an average 63.7% this year and 3.6 million stand to pay 62.3% higher gas bills as suppliers pass on record wholesale rates, data showed on Tuesday.

Like many countries across the world, Germany has been in the grip of an energy crisis since last year, when the lifting of COVID-19 restrictions put huge demands on depleted stocks of natural gas, sending prices of gas, related commodities and carbon emission permits to their highest in years.

Contracts in Europe's biggest economy tend to renew annually which can delay the impact of hikes for many of the total 41.5 million households but price comparison portal Check24 said the trends had now fully fed into the retail sector.

"Power prices are especially high due to higher procurement costs for operators of coal and gas power stations, (weather-related) declines in the production of renewable energy, and simultaneously big demand from industry," said Check24's managing director energy, Steffen Suttner.

The portal also noted that those needing new suppliers because of moving house or company insolvencies, of which there have been only few, were faced with especially high prices.

While the additional annual cost arising from the 63.7% power price hike for a typical household amounted to 1,045 euros ($1,179), the increase for those signing new contracts amounted to 105.8%, adding 1,735 euros to their bills.

In order to try to lessen the hardship for low income households, the new coalition government has decided to scrap a costly surcharge to support renewable power (the EEG fee), which currently constitutes an annual average cost of 222 euros, but only from Jan. 1, 2023.

The fee was cut by 43% year-on-year as of Jan 1, 2022.

Gas customers have to bear additional annual costs of an average 945 euros this year, and those signing new contracts will pay 174.3% more, equating to an additional cost of 2,685 euros, Check24 said.

($1 = 0.8862 euros)

(Reporting by Tom Kaeckenhoff, Vera Eckert, Andreas Rinke, editing by David Evans)