The energy price ceiling brought in by the government to counteract soaring gas and electricity prices will be applied differently to individual households, depending on when their contracts are up for renewal and their usage over the year.

The price ceiling is supposed to cover 1,200 cubic metres of gas and 2,900 kWh of electricity in a year but only households with the ‘average’ usage will actually get the full benefit, RTL Nieuws reported.

In fact, the ceiling will be applied over two periods – one running from January to the customer’s annual review and one from the review to the end of December. Most people with a gas and electricity contract pay the same amount every month which is then reviewed once a year, when a new amount for the following year is calculated.

To work out how much households should benefit, the government has divided the 1,200 cubic metres of gas across the whole year, taking the fact gas use is up in the winter into account.

This means that if a household uses more than the allotted amount of gas in the first period, they will have to pay higher prices for the excess. If they use less than the allotted amount of gas, the saving will not be rolled over to the second period.

If, for example, your annual review takes place on April 13, you will be entitled to a price cap on a maximum of 610 cubic metres of gas and 976 kWh of electricity during the 3.5 months from January 1, according to the economic affairs ministry website.

If you use 800 cubic metres of gas, you will have to pay for the excess 190 cubic metres at the market rate. Even if your full year usage is under the 1,200 cubic maximum, you will still have to pay higher rates for those early months.

Book-keeping

A spokesman for the economic affairs ministry told broadcaster NOS it had not been possible to calculate the price ceiling over an entire year. ‘We are not doing this because we like it, but because it is the only way to manage it for energy suppliers,’ he said.

In practice, the calculation method will not have much of an impact on average households, he said. ‘But if your situation changes considerably during the year… the price ceiling may not be a good fit.’

All households are also being given €190 in November and December to compensate for higher prices. The money will automatically be worked into bills by energy providers.