Wednesday, May 25, 2022

Germany expects mass bankruptcy of companies due to increasing fuel prices…

German Association of Small and Medium-sized Businesses fears mass bankruptcy of businesses because of rising energy prices, according to NEOPresse.

The managing director of the association Markus Jerger published a report in which he criticized the German government for maintaining high taxes on electricity and unrealized reform in the field of benefits for those who use public transport.

“The Federal Small and Medium-sized Business Association fears corporate bankruptcies and job losses due to high energy prices. Energy prices have become an existential issue for many businesses,” he said.

The expert called the cost of gasoline over two euros per liter and a doubling of gas prices unacceptable. This, he said, threatens the loss of a large number of companies and jobs. Jerger urged to minimize the tax on electricity and change the system of benefits for the use of public transport.

The cost of gas in Europe has been highly volatile in recent days. It rose after Russian leader Vladimir Putin signed decrees on February 21 recognizing the sovereignty of the Donetsk and Lugansk People’s Republics, and Russia launched a special military operation against Ukraine on February 24.

But a tangible increase in gas quotations in Europe began as early as last spring when the average spot price on the TTF hub index fluctuated between $250 and $300 per thousand cubic meters. At the end of summer, the cost of the contract with a day ahead delivery exceeded $600, and in early October it was already $1,000. The price high of $3,892 was reached on March 7.

Experts attributed the price hike to several factors: high demand for liquefied natural gas (LNG) in Asia, limited supply from major suppliers, and low levels of occupancy in European underground storage facilities after the long cold winter and hot summer of 2021. Such steadily high prices have not been seen in the history of gas hubs in Europe since 1996.