The seven percent “reduced sales tax” for gas and district heating expires at the end of March. From April 1, households will again pay 19 percent for gas and district heating. Due to the energy crisis, the federal government reduced the tax rate to ease the burden on consumers in Germany.

The consequence for millions of gas and district heating customers: they will have to pay more for energy from April 1. Because with the increase in taxes the gross price of basic and labor prices increases.

This is how expensive it will be for gas customers

As a result of the price increase and the VAT adjustment, an average household with a consumption of 17,500 kilowatt hours of natural gas will incur additional annual costs of up to 478 euros from April 1. But! The impact of the VAT adjustment varies and depends on the rate to which households subscribe. Anyone on an expensive fare and paying a higher basic fare will have to dig deeper into their pockets than someone on a cheaper fare. At the energy supplier EWE in Oldenburg, the average price increase is around 455 euros.

The impact of the VAT adjustment is as follows:

According to the comparative portal Verivox, average gas prices have fallen sharply over the past twelve months, but the price level remains significantly higher than before the start of the war in Ukraine. “Although costs have fallen by a third from their peak in October 2022, private households continue to suffer from high energy costs,” says Thorsten Storck, energy expert at Verivox. Therefore, heating with natural gas will continue to be more expensive in the long term than it was three years ago.

FOCUS online advises: Consumers should definitely adjust the deduction if the energy provider has not already done so. As a rule of thumb, it makes sense to add ten percent. Otherwise, there is a risk of a larger additional payment at the end of the year. The background is that, despite the tax increase, many suppliers continue to apply the old deduction, with the lowest tax rate. The result? At the end of the year the tax difference is missing and clients have paid very little.

This is how expensive district heating becomes

Energy suppliers usually adjust their price lists every six months on March 1 or April 1. Many municipal companies have announced that they will not increase net heating prices, but the increase in VAT increases the final price. In that case, consumers should expect a surcharge of at least ten percent for district heating. This means that one kilowatt hour of heat costs an average of between 11 and 15 cents. The higher tax rate increases the price by a cent or two.

Here too, customers should check and adjust their monthly deduction.

• Case example: The Müller family will continue to pay 224 euros for district heating from April 1, 2024. However, only 188.24 euros of this goes directly to consumption. The sales tax is then 35.76 euros. In March, however, consumers received 209.35 euros. The sales tax was 14.65 euros.

In principle, in the case of district heating, customers are tied to the energy supplier for between five and ten years (in the case of new contracts). A special right of withdrawal is difficult even in the event of price increases, because district heating is a monopoly. On the contrary, this means that customers are actually exposed to price increases and there is no alternative supplier.

Do I now have a special right of termination?

No. The tax increase alone does not give customers a special right of termination. However, if the energy supplier increases prices at the same time, the tariff may be canceled without notice.

Basically, it is important to know which is the cheapest supplier where you live. Only in this way can the savings potential be fully exploited. Comparison portals, consumer advice centers or a call to the energy supplier can help you in your search. Ideally, you can save several hundred euros a year.

FOCUS online advises: Be on the lookout for price guarantees and price adjustment clauses. If you commit to a supplier for two years and they only give you a three-month price guarantee, you will have to pay more for your electricity if the price increases after the fourth month. Also applies: There is often a switching bonus for the first year. If this no longer applies after month 13, base rates and kilowatt hour prices may be higher.