Europe is hoping the new gas levy Germany is introducing for all gas consumers not have “unintended consequences”.

It is hoped that this new tax will allow the country to offset the rising cost of gas imports caused by the reduced Russian gas flows through Nord Stream 1 pipeline.

Germany has asked the European Commission whether this new levy could be exempted from VAT.

In a press conference, Daniel Ferrie, spokesperson of the European Commission for Banking and Financial Services, Taxation and Customs, said: “The EU has been facing the consequences of a global energy market squeeze over the past couple of months.

“We are fully aware of the difficulties member states are facing at the moment. We are fully aware of Germany‘s plans to introduce a new gas levy.

“We are in contact with the German Government on this. We have shared with Germany the wish that this measure does not have unintended tax consequences and that is an extremely important part of this.”

Responding to a question about whether the European Commission will consider a VAT exemption, Mr Ferrie said: “There is no possibility to exempt this type of levy, that’s why I said we are in contact with the German Government to find solutions which would benefit final consumers.”