*

Germany passes law exempting foreign buyers from domestic

gas

levy

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Eastern neighbours said levy hampered efforts to cut out

Russian

gas

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Change to take effect from Jan. 1 2025

(Updates first para and text throughout to reflect the impact

on gas supply for eastern European neighbours)

Dec 20 (Reuters) - Germany's parliament on Friday agreed

to exempt countries transiting gas from a domestic gas levy, a

move welcomed by eastern neighbours who argued the fee hampered

their efforts to diversify away from Russian supplies.

Germany agreed in May to scrap the tariff following

heavy lobbying from Austria, the Czech Republic and Slovakia,

who said the extra cost made alternatives to Russian gas imports

too expensive.

The levy, administered by operator Trading Hub Europe

(THE) since 2022, was designed to help Germany recoup billions

of euros it spent on filling its gas storage caverns to bolster

Europe's gas supplies following Russia's invasion of Ukraine. It

is charged to domestic gas consumers but as a side-effect also

applied to buyers of gas at German cross-border points.

But it has also been a reason why private traders were

buying cheaper gas from the east, Czech Industry Minister Lukas

Vlcek told Reuters in an emailed statement.

"Now I believe that will change. Thanks to alternative

supplies and capacity in LNG (liquefied natural gas) terminals

that we have secured, there isn't any reason to be dependent on

Russia," he said.

Germany's lower house passed a change to the relevant

energy law, effective from Jan. 1 2025, that will exempt buyers

transiting gas from paying the levy, which from the new year is

set to rise by 20% to 2.99 euros a megawatt hour (MWh). The levy

will still apply to domestic gas buyers.

The waiver also coincides with the expected end of

Russian gas flows via Ukraine on Dec. 31.

In Austria, Russian gas still accounted for 89% of

imports in October, according to government data, although the

country's biggest importer, OMV, has since ended its supply

contract with Russian oil giant Gazprom.

Germany has 23 billion cubic metres of underground gas

storage capacity, the largest in the EU.

(Writing by Vera Eckert in Frankfurt and Nora Buli in Oslo;

additional reporting by Jason Hovet in Prague; editing by

Friederike Heine, Susanna Twidale and Susan Fenton)