German consumers will have to put up with high natural gas prices for at least another year after prices exploded as a result of cuts in Russian gas supplies, German Economy Minister Robert Habeck said on Wednesday in an interview with DPA, as quoted by Agerpres.

“We will have to endure high prices for the next year,” said Robert Habek.

He expressed hope that prices will fall again in late 2023, when the necessary infrastructure to replace Russian natural gas is put in place. Even so, prices are not expected to fall below the level they were in 2021, Habek said.

After Russia’s invasion of Ukraine, which before the war was responsible for 55% of Germany’s gas consumption, at the beginning of September, Russian gas supplies to Germany were completely stopped.

This forced the German government to fill its gas storage facilities with supplies from other suppliers before winter. The authorities of Berlin make constant efforts to diversify the sources of gas supply.

A new liquefied gas import terminal has been approved and built on an emergency basis on the North Sea coast.

The government in Berlin also introduced a temporary ceiling on prices for natural gas, heating and electricity to support consumers and industry in the context of accelerating energy costs.

Germany wants to expand its gas infrastructure, pessimism among industrial players

The Minister of Economy of Germany emphasized the importance of further expansion of the gas infrastructure.

“Prices are so high because half of the gas Germany consumes has disappeared as a result of Russian President Vladimir Putin’s decision to freeze supplies, and because we had no supply infrastructure other than pipelines,” he said. Robert Habek.

“If we can continue to expand our infrastructure at the current pace, we will once again connect Germany to the world market. And then we will also have market prices that will be much lower than what we have now,” Habek said, referring to the construction of LNG terminals.

Habeck’s comments came just a day after a survey published by the German Economic Institute (IW) showed that almost 3 out of 5 industry associations in Germany are pessimistic about the outlook for 2023.

Of the 49 associations surveyed (IW), 30 say they expect their members to produce less, and only 13 say they expect their sectors to increase production.

Almost 40 associations also said that the current situation for their companies is worse than a year ago, when most expected economic activity to resume as the COVID-19 pandemic is overcome.