Reuters is reporting that according to a German government document, the financial aid package the government offered, which was designed to help German businesses and households pay their skyrocketing energy costs, will cost over €16.6 billion ($18 billion) by the end of May.
According to the document, which was signed by Finance State Secretary Florian Toncar, and addressed to parliament’s budget committee, the German government will spend about €14.5 billion ($15.75 billion) on setting an electricity price cap, and an additional €2.14 billion ($2.33 billion) for subsidizing transmission network costs over the next two months.
The federal government is entirely funding the electricity price cap, which is designed to ease the effects of surging energy prices on consumers. The cost of the program, which will expire in April of 2024, is projected to be even more than the €16.6 billion ($18 billion) it will cost the government through May.
The plan is expected to be approved by the German parliament’s budget committee on Wednesday.
The German government had announced last year that it was planning to spend ($82.8 billion) to fund the electricity price cap in 2023. It was one part of a larger €200 billion ($199 billion) “defensive shield” the government promised to set aside to aid the citizens and businesses of the nation as they dealt with the soaring energy prices at the time.
Unusually mild weather which has kept gas reserves higher than normal has kept European benchmark gas prices lower than was expected for the last several months. In addition, weaker demand from Asian nations has also freed up supply and kept prices lower, as those cargoes were diverted to European buyers.