Germany’s federal network agency is investigating a potential manipulation on the domestic natural gas market with costs incurred for conversion of one type of natural gas to another, the regulator told Bloomberg on Monday.
Germany converts some of its gas supply as the types of gas from its biggest providers, Norway and the Netherlands, differ and need to be converted in some German regions so that the pipelines and appliances running on gas can function safely.
The costs for the conversion are being managed by market operator Trading Hub Europe GmbH (THE), which has seen “unusual nomination behavior by some balancing group managers,” it has said.
This unusual behavior of gas nominations could have been used to manipulate the market and conversion costs, according to the authorities, who are looking in particular at up to $70 million (60 million euros) in conversion costs incurred between the middle of May and the middle of June this year.
The regulator is investigating balancing managers, which are usually energy suppliers.
If the conversion costs rise, the regulator may raise the so-called conversion levy – currently at zero – in the German gas bills and this would increase energy costs for consumers.
Last week, the German government moved to abolish another levy that’s been weighing on consumer bills.
The government backed a bill to abolish the so-called gas storage levy, which was intended to cover the higher cost of gas supply after Russian deliveries via pipeline to Germany ended.
All consumers of gas, including households, have had to pay an additional levy, which goes to support Germany’s gas importing companies that were struggling with a lack of Russian gas and sky-high prices of non-Russian alternatives in 2022 and early 2023.
The German government is now ready to ditch the gas levy and estimates that the move would mean a total of $3.96 billion (3.4 billion euros) in savings on energy bills, or up to $70 per household per year.
Source: Oilprice.com
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