Dusseldorf Düsseldorf group Uniper is to be bailed out with the participation of the federal government. Private customers and companies should be prepared for a significant increase in gas prices in order to indirectly support Uniper’s bailout.
The German state will take a stake in Dusseldorf gas company Uniper to prevent its collapse. Private customers and companies should be prepared for a significant increase in gas prices in order to indirectly support Uniper’s bailout. This comes after Uniper’s board asked the federal government for help on Friday to stabilize the company. In addition, the Bundestag passed a package of laws to enable it to rescue Uniper and other energy companies.
Uniper employs approximately 11,500 employees. The company was spun off from Eon in 2016 – the promising networks, energy services and green energy business remained with Eon, while the fossil energy business remained with Uniper.
Its boss Klaus-Dieter Maubach told a press conference that the group would soon be threatened with losses of up to ten billion euros. This will happen if it maintains its supply contracts with utilities and companies at previous prices, but compensates for missing deliveries from Russia with more expensive purchases. A “relevant capital increase” from the state is now necessary, which will likely amount to at least 25%. “We will not allow a systemically important company to go bankrupt and cause turmoil in the global energy market as a result,” said Federal Finance Minister Robert Habeck (Greens). The federal government is working on stabilization measures: “We are in contact with all interested parties. The specific form of support is now under negotiation and then decided.”
Bremen mayor Andreas Bovenschulte (SPD) said it was understandable that Uniper, as Germany’s largest natural gas importer, would have to pay a “nine billion injection”. Dusseldorf Mayor Stefan Keller (CDU) welcomed the fact that the federal government wants to save the company. Uniper has around 2,400 jobs in the city. “Not just companies, we all depend on a secure energy supply,” Keller explained. “The protective shield is correct,” said Udo Sieverding from the NRW consumer center. Dusseldorf economist Jens Südekum said: “Uniper must be protected so that the gas market does not collapse.”
When it comes to intervention, difficult decisions must be made. Uniper’s main shareholder, Finnish state-owned company Fortum, would like to dismantle parts of Uniper before the German state gets involved. Then Berlin would not have to be indirectly involved in nuclear plants in Scandinavia, but time pressure makes it very difficult to dismantle them before the bailout.
In addition, the federal government must determine if and when Uniper is allowed to pass on increased purchase prices to the public utility under the new law, or whether a national gas surcharge will spread the burden more widely. If such adjustments are delayed, Uniper shares will become cheaper and cheaper due to further losses to the state. “In any case, the fact that more natural gas is saved would speak in favor of rapidly higher prices,” says economist Südekum.
Uniper boss Maubach and consumer advocate Sieverding expect significantly higher gas prices for end customers soon. Schiverding said the state should then support the poor in a targeted way: “We need a targeted, third relief package for low-income earners, many pensioners and students.”