VAT rises: gas, electricity and district heating will be more expensive from March, which will change for millions of people

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Millions of gas, electricity and district heating customers will have to prepare for higher prices from March. At the beginning of the month, 89 basic suppliers increased gas or electricity prices, and since the end of March, the tax rate for gas and district heating has also increased. FOCUS online tells what this means for your contract and rate.

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From March and April, millions of households will have to prepare for higher electricity, gas and district heating bills. Price adjustments are made in two steps:

  • Starting March 1, 89 basic suppliers will increase the price of gas or electricity. Starting April 1, another 17 providers will follow. But that's not all: other core providers could follow from May 1.
  • The seven percent “reduced sales tax” on gas and district heating will also expire at the end of March. This means that from April 1 consumers will pay a 19 percent tax on gas and district heating, as before the energy crisis.

The following applies to millions of households: they benefit from a favorable tax rate (7 percent) until March 31. From April 1 it will be more expensive and then the tax rate will increase to 19 percent. According to FOCUS online calculations, an average household of three people pays almost 217 euros more per year.

This is how expensive it is now for millions of households

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. This is mainly due to how much gas prices are rising. An example: at the energy supplier EWE in Oldenburg, the price increase is around 455 euros.

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.

Compare gas rates and save

Check now if there are cheaper gas rates in your area.

To maximize savings potential, households should know the cheapest labor prices from suppliers in their area. Comparison portals, consumer protection centers or a call to the energy supplier can help. The ideal is that you save several hundred euros a year.

FOCUS online advises: Check price guarantees and price match clauses. If you commit to the supplier for two years and they only give you a three-month price guarantee, you would have to pay more for electricity from the fourth month onwards in case the price increases. Also applicable: A transfer bonus is often applied for the first year. If it stops applying after the 13th month, base rates and kilowatt-hour prices may increase.

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How to find the cheapest electricity rate

An important step on the path to the cheapest electricity rate is knowing the cheapest labor prices from the energy suppliers where you live. This knowledge can mean the difference between unnecessarily high bills and significant annual savings.

One of the most effective ways to find the cheapest rates is to use comparison portals on the Internet. These portals offer a complete view of the different providers and their rates, adapted to the individual needs and consumption of each home. By entering basic data such as postal code, average annual consumption and preferred contract terms, households receive a list of the cheapest suppliers in their region.

In addition to comparison portals, consumer advice centers are a valuable contact point for consumers who want to know their rights and options. They not only advise on cheap energy suppliers, but also give valuable advice on how to use energy more efficiently in everyday life and thus save additional money.

What applies to district heating?

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. Consumers should expect a surcharge of at least 10 percent. 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.

Customers are typically tied to the energy supplier for between five and ten years (for new contracts). A special right of termination is difficult 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.

Who will increase prices starting March 1?

For electricity and gas, and therefore also for district heating, basic suppliers must announce price increases at least six weeks in advance. For March, 89 suppliers have announced electricity price adjustments and for April 17 more suppliers will join. You can find the full list here:

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