German government scheme will pay people's energy bills this December

German households and businesses could have their energy bills paid for a month this winter under new proposals.

The €96 billion (£84 billion) two-stage scheme, drawn up by a panel, suggests the state take on the cost of customers’ monthly gas bill in December, followed by a price subsidy for part of their consumption from next March.

That “gas and heating price brake” would apply until April 2024, with consumers paying a reduced rate on up to 80% of their consumption.

Panel co-chair Veronika Grim said the set price from next spring would be a “new normal” but would at least prevent price rises beyond that.

“It’s not going to be the case that the price goes back down to 7 cents in the future - we won’t receive Russian gas for a long time," she said.

The German government said it supported the commission's proposals as Europe's largest economy acts to ease pressure on households ahead of winter amid rising inflation and soaring prices.

Germany's reliance on Russian gas means it has been hit hard by the war in Ukraine and resulting disruption and damage to under-sea pipelines. The country's dependence on Russian energy, has not just hit energy prices, but has put Germany at risk of running short this winter.

Germany got a bit over a third of its gas supplies from Russia before the supply disruptions started, and previously more than that.

In an effort to maintain supplies as well as keep costs lower, the German government has introduced a raft of new measures to ensure sufficient energy supplies for the winter, and to minimise spiralling price rises, including a controversial return to coal and oil powered energy plants.

There has also been a campaign to encourage consumers to cut down on usage to reduce the risk of blackouts.

The plan drawn up on Monday would be paid for by a €200 billion relief package Chancellor Olaf Scholz's government announced in September.

German inflation hit its highest level in more than a quarter of a century in September at 10.9%, driven up by higher energy costs.

Russia started reducing gas supplies to Germany through the Nord Stream 1 pipeline, the main supply route, in June and cut them off completely over a month ago. The pipeline has since been damaged by underwater explosions.