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Price subsidies may impair competition in retail market for natural gas

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  • Atayev, Atabek
  • Hillenbrand, Adrian

Abstract

Policymakers have been discussing various potential measures to cushion the impact of skyrocketing gas prices and prevent supply shortages. On 10 October 2022 an expert commission in Germany proposed a plan to keep natural gas affordable while also preventing shortages. The main element of the plan is a direct subsidy for gas-consuming households. This ZEW Policy Brief aims to warn that price subsidies in the retail market for natural gas could impair competition between providers by reducing incentives for customers to search for cheaper service plans.

Suggested Citation

  • Atayev, Atabek & Hillenbrand, Adrian, 2022. "Price subsidies may impair competition in retail market for natural gas," ZEW policy briefs 6/2022, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewpbs:62022
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    Cited by:

    1. Markus Dertwinkel-Kalt & Christian Wey, 2022. "Why “Energy Price Brakes” Encourage Moral Hazard, Raise Energy Prices, and Reinforce Energy Savings," CESifo Working Paper Series 10163, CESifo.
    2. Dertwinkel-Kalt, Markus & Wey, Christian, 2023. "Why Germany's Gas Price Brake Encourages Moral Hazard and Raises Gas Prices," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277575, Verein für Socialpolitik / German Economic Association.

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