Estonian Minister Sikkut: EC proposal to limit EU gas price increases may be accepted
BRUSSELS, 24 November – RIA Novosti. Estonian Minister of Economy and Infrastructure, Riina Sikkut, finds acceptable the European Commission’s (EC) proposal on a mechanism to limit strong increases in gas prices in the European Union.
“The proposal on the table is quite normal. But the measure should be temporary and only be applied for extreme price increases,” he told reporters on arrival at the EU Council of Energy Ministers.
An EU source told RIA Novosti earlier that EU countries’ energy ministers are expected to discuss the possibility of creating such a mechanism at an extraordinary meeting on Thursday, but they will not decide.
On 22 November, the European Commission proposed the creation of an interim mechanism to adjust the gas market in the European Union as another measure to tackle the energy crisis. The EC hopes that the mechanism will help reduce gas market volatility and protect EU residents and businesses from sharp increases in gas prices.
The mechanism will be launched if two conditions are met simultaneously: the settlement price of the monthly futures contract in the TTF index exceeds 275 euros per MWh for two weeks (a little more than 2.8 thousand dollars per thousand cubic meters of gas in euro-dollar parity) and the TTF price The difference between the price of LNG and the global LNG is at least 58 Euros for 10 consecutive trading days. When the mechanism is activated, a price exceeding 275 euros will not be traded.
However, this is a very high level. The settlement price of monthly TTF futures exceeded 275 euros in the entire history of the center for only a few days in August of this year. Thus, on August 19 it stood at about 245 euros per megawatt-hour, jumped to a historic maximum of 340 euros on August 26 (just over 3.5 thousand euros per thousand cubic meters) and dropped rapidly, to about 265 euros on 30 August.
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