KYIV. UkraineGate .17 . October . 2022 | Political News .
The European Commission plans to offer a temporary gas price ceiling in the EU to curb extreme prices, according to the Financial Times .
Citation
“Brussels plans to propose an emergency mechanism to curb gas prices when they reach extreme levels, as the EU seeks to take control of the bloc’s energy crisis,” the newspaper writes.
Details
According to the draft proposal of the European Commission, the EU should reportedly be able to set the maximum “dynamic price” at which gas agreements can be concluded at the TTF site in the Netherlands, which is a guideline for gas trade in the bloc.
The goal is to give the EU the opportunity to intervene in the event of extreme natural gas prices without compromising security of supply or encouraging consumption, the draft says, and it adds that any such price ceiling should be valid for only three months.
The European Commission’s proposals, as noted, also include measures to limit volatility in the energy derivatives markets, as well as a long-term project to create a new benchmark for liquefied natural gas. The project proposes urgent measures to ensure more effective cooperation of the bloc’s member states in the field of gas procurement with a special focus on filling storage facilities next year, the publication writes.
The plans are said to have been discussed at an extraordinary meeting of European commissioners on Sunday and will still have to be discussed between member states ahead of the European Council meeting on Thursday and Friday in Brussels.
Germany, which has the largest gas market in the bloc, was among the member states that were skeptical of the idea of imposing restrictions on gas prices, fearing that it could eventually support demand or undermine supply inflows, the publication notes.
“There is no agreement among the leaders on the price cap – this is very controversial,” one EU official said before a meeting over the weekend. “Each form of restriction will have a different effect, (depending on) where you are in Europe.”
Supplement
The draft proposal, reviewed by the Financial Times, emerged as member states prepared for a summit aimed at finding common solutions to contain the energy crisis in Brussels on Thursday and Friday. EU governments are arguing about how best to cope with rising energy prices together, and the issue of limiting gas prices has turned out to be particularly controversial.
Source: Ukrgate
