EU Gas Price Cap Receives More Push Back

A group of seven EU member states is pushing for a more dynamic gas price cap according to documents seen by Bloomberg. The states argue that the EU’s gas price cap proposition is designed that it won’t get triggered and therefore does not help consumers to pay their bills.

• EU ministers remain polarised on their views towards a gas price cap.
• Countries including Italy, Belgium and Greece are submitting an amendment that would set a cap based largely on a fixed level – using as an example €160/MWh – but also a floating element based off prices at key international hubs.
• On 22 Nov, the EU proposed an emergency cap on benchmark gas futures at €275/MWh, for when TTF does not reflect market fundamentals. The proposed cap also includes conditions for the cap to come into place, such as a 10-day period of price above the cap and a premium to LNG prices.
• “The condition of two consecutive weeks of sustained high gas prices is not effective for delivering immediate positive results for the market. The triggers levels are far from preventing episodes of excessive gas prices”, the document said.
• The EU energy ministers have deferred agreement on the joint gas price cap until 13 Dec.