Germany plans to subsidise a basic level of electricity usage for households and set aside cheaper power for small and medium-sized businesses, according to measures set out in an Economy Ministry paper seen by Reuters on Thursday.

Electricity distributors would be required to grant households a certain electricity quota at a discounted price per kWh, with a similar contingent planned for small and medium-sized enterprises, the paper said.

The stated goal is to decouple the price of electricity from the price of gas, which has rocketed since the Ukraine war due to a plunge in Russian imports to Germany.

The ministry also detailed a planned cap on electricity prices for producers, with the difference on the market price to go towards funding the relief.

Germany also backs EU plans to impose a price cap on electricity, according to the paper.

However, it said: "If agreement cannot be reached quickly enough at European level, a national solution should be sought." (Reporting by Markus Wacket, Writing by Rachel More Editing by Madeline Chambers)