EC Eyes to Extend European Gas Price Cap

The European Commission is weighing whether to extend the emergency gas price cap amid fears that the conflict in the Middle East and sabotage of the Balticconnector pipeline could push prices higher again this winter according to a presentation given to diplomats from the EU’s 27 member states and seen by the Financial Times.

• The European energy ministers in December agreed to set a price cap on natural gas prices, or gas market correction mechanism, at €180/MWh that came into force on 1 February for the duration of one year. The cap will come into effect when prices exceed the ceiling on three consecutive trading days and the difference between TTF gas prices and global LNG benchmarks is greater than €35/MWh.
• “We don’t know what will happen this year. We have the situation in Israel and we don’t know how that will affect imports from the Middle East,” one EU diplomat said.
• They added that a gas pipeline in the Baltic Sea that was sabotaged earlier this month was another concern and “it would be good to have an insurance policy”.
• The Commission is due to present a proposal in November, confirming whether to extend the current gas price cap, while also looking at other emergency energy measures.