Page 5 - EurOil Week 27 2022

EurOil COMMENTARY EurOil

February. and, according to FAZ sources in government
Uniper has a €2bn credit line from German circles, will not be applied in its current form.
state-owned KfW Bank, which has not yet been The new rules say the energy providing com-
drawn down, and had to write off a $1bn loan panies along the supply chain have the right to
to Nord Stream 2, which has been blocked by raise their gas prices for their customers to a “rea-
sanctions. sonable level”. But what level that is has not been
Germany’s RWE said in a statement to Reu- specified.
ters that its liquidity is sufficient and it was not in In addition, the energy companies fear waves
talks with the government. of lawsuits from customers, as not everyone will
Berlin is considering introducing additional be equally affected by the price rises.
network charges for private and industrial cus- If the new rules are enacted THE will act as a
tomers, the Frankfurter Allgemeiner Zeitung kind of clearing house for tariffs, supervising the
(FAZ) reported on June 30. business of the traders.
The company Trading Hub Europe (THE) It is still unclear how high the price increases
will provide liquidity support to large German will be for customers, but they could be signifi-
traders such as Uniper so that they can pay for cant, reported FAZ.
the replacement gas procurement, reports FAZ. The big question is whether the help will
Currently energy traders have to buy gas come quickly enough. If the gas traders run out
natural gas on the open market at vastly inflated of money before the new rules are implemented,
prices but cannot pass these increases directly on they will not be able to buy the more expensive
to their customers and are incurring huge losses gas from the post market.
as a result. German energy giant Uniper has already
A new Energy Security Act (ENSIG) that is approached the government for financial
being approved provides for price adjustment support.
rights for traders in the event of reduced gas Bridge financing from the federal govern-
imports. Currently governments have intro- ment is therefore being discussed, which will
duced price caps on energy to protect consumers. provide additional loans from the German KfW
The change in rules was made possible after bank.
the government triggered the energy crisis KfW is already supporting the utility Wingas
“alarm” that is part of EU law introduced in 2017. with €10bn since Gazprom largely stopped sup-
The change in rules will be very controversial plying its former subsidiary. ™

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