BERLIN - The German government has agreed on a comprehensive relief package which involves significant but responsible spending to tackle soaring energy prices, government sources said on Thursday.

One source said a volume of €200 billion (S$280 billion) had been discussed. A previously planned gas levy on consumers would be scrapped under the package so as not to further fuel gas price increases.

The chancellor's office said the government will hold a news conference on the energy situation at 2pm local time in Berlin on Thursday.

Chancellor Olaf Scholz, Economy Minister Robert Habeck and Finance Minister Christian Lindner are expected to present a comprehensive response to high gas and electricity prices.

The gas levy, which was due to come into effect from Saturday and remain in place until April 2024, was conceived with a view to helping utilities cover the cost of replacing Russian supply.

However, the need for the levy came into question after the government's decision to nationalise Uniper, Germany's biggest Russian gas importer.

Berlin has suspended its limit on new debt of 0.35 per cent of gross domestic product this year.

Mr Lindner has said he wants to comply with the limit next year.

REUTERS