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EU fails to agree on gas price cap

Nearly half of the bloc’s members reportedly want a lower ceiling, while others are skeptical about the measure

EU nations have failed once again to finalize a bloc-wide gas price cap at a Council of Energy Ministers meeting, Hungarian FM Peter Szijjarto said on Tuesday. Some states want to lower the ceiling, while others say the measure could wreak havoc on the energy markets.

“There was a lengthy debate at the Energy Council meeting. No agreement was reached at the plenary, so discussions will continue on a bilateral basis,” Szijjarto wrote on Facebook.

Opinions regarding the measure proposed weeks ago differ greatly among the 27 EU member states, with some doubting its effectiveness in fighting the energy crisis, and others calling for the lowest cap possible.

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Under the original plan put forward by the European Commission, the gas price cap should be triggered when prices on the TTF exchange, Europe’s gas benchmark, reach €275 ($292) per megawatt hour and are €58 higher than the LNG reference price for two weeks. The plan was met with criticism, with some member states worried it would only worsen market volatility, while others argued that the level was too high to be effective.

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EU divided over gas price cap – CNBC

Last week, the EU Council proposed reducing the level of the cap to €220 and slashing the timeframe to five days, while also lowering the gap with global LNG prices to €35, according to a draft document seen by Reuters. However, 12 countries reportedly said this cap would still be too high, demanding it be lowered to €160 with a €20 spread.

Earlier on Tuesday, France’s minister for energy transition, Agnes Pannier-Runacher, said that an agreement over the cap could be reached sooner rather than later.

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“I believe we have started to bring our positions closer,” she told the press ahead of Tuesday’s meeting, adding that any price cap must aim to “ensure the stability of the financial markets.”

For more stories on economy & finance visit RT’s business section

December 13, 2022 at 10:20PM
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