Energy ministers of the EU will meet at another emergency session in November to try to implement a gas price cap for the entire EU.
The cap will apply to the Dutch Title Transfer Facility, Europe’s central gas trading hub, and other similar facilities. Ministers hope the emergency cap will prevent severe speculation and volatility in response to disrupted energy supplies from Russia, following its invasion of Ukraine.
On Tuesday, the EU Council examined the energy situation at a summit in Brussels. There, ministers decided that measures should be accelerated and intensified to cut energy use, avoid rationing, secure supply, and lower prices.
Additional measures include a temporary dynamic price cap on natural gas transactions to control high gas prices. This cap would be structured so as not to jeopardise supply security and increase gas consumption.
Implementing a “dynamic price cap on electricity and gas” would minimise the extreme price rises in case of market panic, according to Czech industry minister Jozef Síkela, who mediated the negotiations at the summit.
The council members issued a statement, reading: “In the face of Russia’s weaponisation of energy, the European Union will remain united to protect its citizens and businesses and take the necessary measures as urgent.”
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Síkela said: “The main question is how to make sure that capping will still allow us to buy the gas we need on the market.”
In response to Russia’s invasion of Ukraine, the EU and the G7 countries separately agreed to set a price restriction on Russian oil and gas. This would include an exemption for nations like Hungary, which rely on Russian oil via pipelines.
Some countries remain sceptical
Some countries, such as Germany and the Netherlands, remain sceptical about the price cap. Ministers noted the possibility that it may increase gas use or leave countries unable to purchase enough. Belgium, Italy, Poland, and 12 other countries have called for a cap to help keep inflation in check.
Hungarian Foreign Minister Peter Szijjarto has also warned that a proposed European price cap on Russian natural gas would result in Moscow abruptly shutting down the supply to Europe.
Miller told Russian broadcaster Rossiya 1: “We are guided by the contracts that have been signed. Of course, such a unilateral decision is a violation of the essential terms of the contract, which entails the termination of supplies.”
In September, the German government announced a $197bn (€200bn) fund to protect the security of German consumers and businesses, including a gas price cap.
In the same month, the European Commission proposed an “emergency intervention” to tackle the soaring prices in Europe’s energy markets. As gas-fired power generation significantly impacts the price, the proposal suggested a mandate to reduce energy use by at least 5% during selected peak pricing hours.
Kadri Simson, European Commissioner for energy, said: “As we develop this short-term tool, we must ensure the security of supply and avoid an increase in gas consumption.”