FT: EU countries say €275 gas cap too high
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The EU countries are dissatisfied with the European Commission’s proposal to limit Russian gas prices at the level of 275 euros per MWh, or about $2,800 per thousand cubic meters. m. In their opinion, such a ceiling is “too high”, reported newspaper Financial Times.
“It’s a joke. This is a proposal that will not bring anything useful to anyone, even under the extreme scenario observed in August. This is not a limitation,” said Simone Tagliapetra, a senior fellow at Brussels-based think tank Bruegel. In August, gas prices on the London ICE exchange soared above 300 euros per MWh after Nord Stream supplies were cut off, but prices then held at that level for only a week.
According to a senior EU official, setting a ceiling above 250 euros per MWh is just a way to “remove the cap”. However, an ICE spokesperson opposes any price cap as it would “create a significant increase in margins, which could destabilize the market.”
The day before, November 22, EC suggested set a price ceiling for the monthly gas futures on the TTF hub index at 275 euros per MWh. According to the EC proposal, the mechanism will start automatically when two conditions are met. First, the price of gas exceeds 275 euros for two weeks. The second is if the TTF price is €58 above the LNG base price for 10 trading days. The press service of the EC writes that this mechanism can be activated from January 1, 2023.
It is specified that the proposal will be submitted for discussion tomorrow, November 24, but the final decision on this issue should not be expected until December 19, when the next meeting of EU energy ministers will take place, writes the Financial Times.
Speaking at the forumRussian Energy Week» On October 12, Russian President Vladimir Putin once again stressed that energy supplies to those countries that approve the price ceiling would be cut off. Before that, he repeatedly said that the introduction of restrictions would lead to an increase in energy prices. During the Eastern Economic Forum (EEF), Putin said that the idea of imposing a price ceiling on energy resources is “nonsense and nonsense.”
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