ᐅ Gas Prices – Where Is Gas Still Affordable?

-The automotive industry, as MayCh mentions, is experiencing a 96% decrease in production compared to last year. Including all the suppliers, this affects around 10 million jobs. There are no layoffs yet; instead, working days are being reduced and employees are sent on leave to grow potatoes (no joke). Of course, salaries are also being cut.

-Severstal and Magnitogorsk, the steel strongholds, are complaining about the artificially strong ruble. Exporting is no longer profitable because they bring home too few rubles and remain in the red. They plan to reduce exports by about 20% in the near future. This will likely drive up our steel prices. The wave of layoffs in Russia has not started yet here either.

-And this pattern runs through all industries across the board.

I find the example quite fitting: two drivers approaching each other, each trying to force the other to swerve.

Regarding NS2: a year ago, I supported it. It was very unpleasant that the Americans wanted to interfere here and sell their liquefied natural gas. It is clear now that it should not be opened. But assuming peace is signed tomorrow, I remain skeptical whether NS2 would actually be put into operation...

SumsumBiene schrieb:

I don’t believe many people would emigrate if there was a war here. A sense of belonging to one’s homeland is something quite different. But overall, we are doing really well... if you have the capacity to decide whether the washing machine’s color matches the rest of the furnishings, or whether to get a third dog, the next horse, or if there are (paid) diversity officers/professorships... yes, on the whole we are doing well. Exceptions of course exist, and I don’t want to dismiss those or ignore the many problems heading our way. Still, the basic idea of becoming less dependent over the next decades is very important. Otherwise, the next government will have us under its thumb.

What are you currently paying for gas per kWh?

Am I right in thinking that only renters will be affected by these back payments because they don’t have oversight of when the price was raised and what their consumption is?
I asked our previous landlord in January if the gas price had gone up, otherwise I would have paid more. The indifferent answer was, “I don’t know, we’ll see that next year.”
I would expect some duty of care from landlords in this regard.

Almost exclusively, tenants will be affected by the huge back payments.
That doesn’t change the fact that owners also have to bear the higher costs. Take my son’s example: until February, it was about 6 cents, now around 12 cents per kWh. That already means a doubling from about €130 to €260 (about $140 to $280) per month. Added to that is Habeck’s allowance starting in October of possibly 5 cents, which means another €100 (about $110) more per month. From February 2023, we’ll have to see what the provider charges; on the usual comparison sites, there is currently nothing below 24 cents per kWh. He planned to build a new house next year because the current one is old and just fits two people, but now they have had a child and need more space. Both earn relatively average incomes for this region. But suddenly a lifelong dream is shattered, years of planning go down the drain.

A change over the coming years would be reasonable, but not within just a few months!

Sure, overall we are doing well, especially when viewed globally. But that doesn’t mean the majority choose a washing machine by its color. Many people can’t even pick a new washing machine if the old one breaks—they have to make do with a secondhand one.

motorradsilke schrieb:

On the usual comparison portals, there’s nothing below 24 cents right now.

That’s quite high you’re aiming for. The local supplier currently offers new contracts at 12 cents, and a nationwide yellow provider at 17 cents. I was paying 2.7, then 5, and now 10 cents at the beginning of the year. I’d be surprised if we’re below 20 cents in February 2023.

motorradsilke schrieb:

Both earn roughly average for this area.

Well, the problem is that "roughly average" hasn’t been enough for a detached single-family house in many regions for years now. The “few euros” in operating additional costs tend to be negligible considering the current context of construction interest rates and material prices.

motorradsilke schrieb:

Almost exclusively tenants will be affected by the huge additional payments.
But that doesn't change the fact that owners will also have to bear the higher costs. For example, with my son: until February it was about 6 cents, now around 12 cents per kWh. That already means a doubling from about €130 to €260 per month. On top of that, Habeck’s surcharge from October of maybe 5 cents, which means another €100 more per month. From February 2023 we’ll see what the supplier wants; usual comparison sites currently show nothing below 24 cents. He wanted to build a new house next year because the current one is old and barely enough for two people, but now they have had a child and need more space. Both earn roughly the local average. But right now, a lifelong dream is falling apart, years of planning are going down the drain.

A change over the next few years would be right, but not within just a few months!

Sure, overall we are doing well, especially when looking globally. But that doesn’t mean most people choose a washing machine by its color. Many people simply cannot afford to choose a new washing machine at the moment; when the old one breaks, they have to try to find a used one.

But the building problem is not directly related to rising gas prices. We couldn’t afford to buy right now either.
In our 75sqm (800 sq ft) rental apartment (25-year-old multi-family building) we paid about €80 to €90 for gas (unfortunately, I don’t know the cents/kWh there). Now we have a 100sqm (1,080 sq ft) house and pay €245 per month at 16 cents/kWh. Plus another €120 for electricity. No, I absolutely did not expect this in the household budget, and now there’s hardly anything left to save, keep in reserve, or make extra repayments. But as a homeowner now, I’m naturally keeping a close eye on both meters and so far I feel positive. The only thing worrying me is the lack of planning security, due to lack of experience.

And of course, a gradual change would probably be more pleasant, but that doesn’t necessarily make it easier than being thrown in at the deep end. Maybe in 20 years we’ll say...
All just hypotheses...

MayrCh schrieb:

You're aiming pretty high there. The local utility provider currently charges around 12 cents per kilowatt-hour for new contracts, while a nationwide yellow tariff is at 17 cents.
At the beginning of the year, I paid 2.7 cents, then 5 cents, now 10 cents. I would be surprised if we’re below 20 cents by February 2023.

Well, the tricky part is that what counts as “somewhat average” for a detached single-family house hasn’t been realistic in many areas for years. The “few euros” of additional operating costs are almost negligible compared to current construction interest rates and material prices.

Prices are not the same across the whole country. Here (the Berlin surroundings) it’s unfortunately as stated.

And last year, he still could have built a house with his income, since he’s doing a lot himself and the land should be paid off by the start of construction. The “few euros” become 250 euros from October and probably 300 or 400 euros next year, plus extra electricity costs of about 100 euros.
If you can manage a monthly payment of 1,000 euros fairly well, then the extra 500 euros is the breaking point.

SumsumBiene schrieb:

But the construction issue is not directly related to the rising gas prices.

Yes, it is, as mentioned in the last post. While rising interest rates and material costs might have been manageable before, they no longer are when it comes to gas prices.