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Business

Müller Threatens to Appoint Regulator for Gas Market

Economics Minister Werner Müller told the country's gas suppliers and their big industry clients that if they can't agree the terms of deregulation of the gas market, he will appoint a regulator.

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No solution in sight for Germany's gas woes

Speaking at the Hanover Trade Fair, Müller said he had given the parties to deregulation talks an absolute final deadline of July 31 to settle their differences.

If they didn't succeed by this date, he would propose the setting-up of a regulatory body.

So far, both sides have always argued against the use of a regulator, even though it is favoured by the EU as a way of promoting competition on markets that once functioned as monopolies.

The minister had hoped to be able to use the world's largest industry trade show to announce an agreement. But though the two sides had negotiated right until the last moment in an effort to settle all disputed points, he had instead to announce the talks' provisional failure.

Following an agreement by Germany's power suppliers and their industrial clients, Germany was able to liberalize its power market without the use of a regulator, and it was hoped that the gas market could follow suit.

But the talks – which involve all the leading industry federations representing the producers and distributors of gas and their big clients – have been underway for two and a half years, and so far the results have been highly unsatisfactory.

Werner Müller

Germany's Economy Minister Werner Mueller presents his annual report in Berlin, Tuesday, July 17, 2001. Mueller insisted Tuesday that the German economy can still meet the government's prediction of growing by 2 percent this year, although many economic institutes are predicting it may reach only half that level. (AP Photo/Jockel Finck)

Now Müller (picture) is expecting to have a functioning regulatory body in place by 1 January 2003. Even if a regulator is installed, consumers cannot expect the kind of price cutting that's been seen on the telecommunications market.

The gas price charged to end users is dependent on the price of imported gas, and a price agreement – expressed in terms of the price of oil – is usually inscribed in long-term supply contracts.

A total of 80 percent of Germany's gas comes from Russia, Norway and the Netherlands

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