Gas prices will soon drop as Germany hits storage targets, minister says

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German Economy and Climate Action Minister Robert Habeck speaks during a press conference on the future use of liquefied natural gas (LNG), in Berlin, Germany, on 16 August 2022. REUTERS/Lisi Niesner

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BERLIN, Aug 29 (Reuters) – German Economy Minister Robert Habeck expects gas prices to fall soon as Germany makes progress on its storage targets and will not have to pay the high prices currently being demanded in the market, he said on Monday.

“As a result, the markets will calm down and fall,” he said, adding that they had recently risen due to high demand as well as market speculation, which could not be sustained in the long term. .

Gas storage facilities in Germany are almost 83% full and will reach 85% in early September, Habeck said at an energy event in Hamburg. Germany has set a target for gas storage levels to be 85% full by October 1 and 95% by November 1.

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Habeck also reiterated that Germany will not allow a Lehman Brothers-like meltdown to occur in its gas market.

“I promise on behalf of the German government that we will always ensure the liquidity of all energy companies, that we do not have a Lehman Brothers effect on the market,” Habeck said, referring to the bank’s collapse. American investment, which helped trigger the 2008 Financial Crisis.

Germany will impose a gas tax on consumers from October 1 to March 2024 as part of measures to ensure that utility companies remain sufficiently liquid to maintain an intact gas market.

Uniper (UN01.DE), Germany’s largest importer of Russian gas, needed a 15 billion euro ($14.93 billion) government bailout last month after Russia dramatically cut its flows, forcing Germany to buy gas elsewhere at much higher prices. Read more

The German government has warned that utilities risk a collapse similar to that of Lehman Brothers, due to soaring energy prices.

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Reporting by Miranda Murray and Christian Kraemer Editing by Paul Carrel and Susan Fenton

Our standards: The Thomson Reuters Trust Principles.

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