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Post: EC says it will be difficult to agree on a gas price cap in the EU


Gas station in Hungary. archive photo

European Commissioner Simson: Agreeing on a gas price limit in the EU will be difficult, countries differ

BRUSSELS, 13 December – RIA Novosti. European Commissioner for Energy Kadri Simson said that before the start of the EU Energy Ministers Council, which will discuss the issue, EU countries have very different views on the draft mechanism to limit gas price increases in the largest TTF centre, and that an agreement will not be easy. problem.

“The goal is to discuss and agree on a market correction mechanism that will allow us to limit excessive gas prices. It will not be easy because we need to balance the benefits and risks of such a mechanism. It will also be difficult because countries have so many different views and a variety of concerns mechanism,” he said.

“But since we have to come to an agreement, everybody should show some flexibility, everybody should be able to offer some concessions. I expect the Ministers to have a very constructive discussion that will get us a solution with the greatest possible support from the members.” countries,” added Simson.

On 22 November, the European Commission proposed the creation of a temporary gas market adjustment mechanism in the European Union as another measure to tackle the energy crisis. It is designed to contain strong increases in the cost of this fuel. The EC suggested that the mechanism could be launched if two conditions were met at the same time: The estimated price of the monthly futures contract on the TTF index exceeds 275 euros per MWh for two weeks (a little over $2.8k per thousand cubic meters of gas in 2010). euro-dollar parity) and the difference between the TTF price and the global LNG price is at least €58 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.

EU energy ministers had already discussed this EC proposal at the previous meeting on 24 November, but they certainly disagreed, especially on the limit level. The project was then handled at the level of the permanent representatives of the Union of EU countries.

Several changes have already been made to the EC proposal, notably as Bloomberg reported, the Czech presidency of the European Council proposed to reduce the limit to 220 euros and the difference to 35 euros for LNG, but this proposal did not bring any results. compromise.

Concerns about the mechanism include the previously mentioned, in particular, the risk of supplying gas with a price cap.

Source: Ria

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