EU Ministers to Extend Gas Price Cap, EFET Advises Against Extensions

EU ministers are expected to approve the extension of several emergency energy measures, including the gas price cap, by at least one year during a meeting next Tuesday, a senior diplomatic source told Montel. The European Federation of Energy Traders (EFET) advises against the extension.

• “The energy crisis is not completely over. The shaky foundations in the global markets remain, with the Russian war [in Ukraine] still going on,” said the source.
• “We decided it was safe to renew the package of emergency measures just in case. We do not expect a full-blown discussion.”
• Ministers are expected to extend the gas price cap for one more year until 31 January 2025, the source said. So far, the mechanism has never been triggered.
• EFET advised against extending the Market Correction Mechanism as “the proposal cannot reduce global gas prices but it seeks instead to make gas at high prices more difficult to hedge and more risky to purchase.”
• The group also pointed out that the mechanism has not caused the fall in gas prices and the MCM does not contribute to energy security but endangers existing contracts and raises barriers to accessing gas.
• Ministers are also expected to extend the EU’s joint gas buying measure by one year until the end of 2024 and to approve the extensions of emergency rules aimed to speed up renewables permitting processes.