Dr. Bernhard Reutersberg
The oil price is constantly reaching new heights, and gas prices are inevitably following. The public are very concerned because rising energy prices affect everyone: commuters travelling by car to work every day; families having to struggle with ever higher energy bills; industry faced with the urgent need to avoid exploding costs because of global competition.
But how great is the influence that can be exercised by a company like E.ON Ruhrgas? Far smaller than is generally believed. Our scope for determining price developments is greatly overrated. Price rises stem from gas producers themselves. We pay them well over half of the average end-user price for gas in Germany.
The government skims off a quarter. Only 10 % remain with gas transmission companies like E.ON Ruhrgas. Import prices are therefore a decisive factor in gas price developments. This is where oil price indexing comes into play.
It prevents the few gas producers from arbitrarily pushing prices upwards. They could do so easily by withdrawing gas from the market at will, thus artificially creating shortages. Oil price indexing protects us against that. Gas producers commit themselves contractually to pegging prices transparently to the market development of the main rival product: to the oil price. Not only Germany but the entire gas industry in continental Europe secures market prices with the aid of this tool.
So is it true that we would have lower gas prices without oil price indexing, as is being claimed at present with great media impact by consumer protection groups or by Claudia Kemfert of the German Institute for Economic Research (DIW)? And is this true at a time when more and more new competitors like China and India are massively entering the market? No!
Gas and oil prices move synchronously on global exchanges where gas is traded on a short-term basis and without oil price indexing. And in countries without oil price indexing the gas price likewise follows the oil price. There, however, we often detect major price fluctuations in an upward direction. In countries heavily dependent on gas, like the UK and Italy, this has played a part in prompting the governments to reverse their energy policy, at least as far as the use of nuclear power is concerned.
To make this clear once more: We, too, are concerned about current developments. But we respond to the situation with a sense of reality and do everything to at least cushion the current price increase. We are looking worldwide for new gas sources to tap for Germany and are investing billions of euros in our own gas production. And we are setting new standards in the use of renewable energies with biomethane.
But, in my opinion, what we also urgently need is an objective discussion without populism on the urgent energy issues and on the subject of prices. For this we should all sit down at a table: politicians, industry and consumer associations. We for our part are seeking such a debate.