Germany's power, gas and water industry association, BDEW, Tuesday said it opposes the creation of a state-controlled gas reserve, saying such a move would result in higher gas prices rather than improve security of supply.
"The German energy industry stand for a secure and reliable supply of natural gas," said BDEW President Rolf Martin Schmitz in a written statement.
In August, Economics Minister Michael Glos promoted the idea of a reserve after European Union relations with Russia, Europe's largest supplier of natural gas, cooled significantly in the wake of the war in Georgia.
BDEW said German energy companies have invested around EUR11 billion in expanding the pipeline grid since 2000, and noted there are 46 underground gas storage facilities with a total capacity of around 20 billion cubic meters, which equates to around 25% of Germany's gas consumption in 2007.
Separately, BDEW said falling crude oil prices could result in declining gas prices in 2009.
Most German gas suppliers raised their prices from Oct. 1, citing increased energy procurement costs. The increases came in spite of the recent sharp decline in crude oil prices, to which gas prices are linked with a six-month delay.