BERLIN (Reuters) - German consumers must prepare for drastic electricity and gas price increases if the European Union cuts off Russian gas, E.ON Germany's chief executive said on Tuesday, adding prices were already rising rapidly even without such a move.
Speaking to German news organisation RND, Filip Thon warned that the energy firm was already seeing wholesale retail prices 20 times higher and electricity prices eight times higher this spring than a year ago.
How much further prices would rise in the event of a ban on gas from Russia depended on the extent to which Germany increases its reserves, currently at around 25 to 27 percent of capacity, ahead of the next cold season, Thon said.
"The situation is very tense, even without a stop in deliveries," Thon told RND, adding that the end of Russian gas imports would have "drastic consequences for the German economy."
The CEO called for the state to provide more financial support to private households to soften the blow, such as by lowering taxes on energy bills.
After years of prospering from Russian energy imports, Germany is convulsed by a debate over how to unwind a business relationship that critics say is financing Russia's invasion of Ukraine. Russia supplies 40% of Europe's gas needs.
German Finance Minister Christian Lindner on Monday rejected an EU embargo on Russian gas imports as mounting civilian deaths in Ukraine increase pressure on the bloc to impose sanctions on Russia's energy sector.