EU plans to increase gas price cap to prevent winter crisis – FT

The EU is considering extending the emergency gas price cap introduced earlier this year.

This was reported by the Financial Times. The media refers to a presentation by the European Commission for EU diplomats it was permitted to see.

The European Commission said that “there are no signs of negative consequences” since the measure came into force and that gas prices are now almost 90% lower than last year.

The price cap was introduced after weeks of intense debate among member states, with Germany and Austria initially opposed, arguing that it would distort markets and exacerbate supply shortages.

But, as the European Commission’s presentation points out, the restriction has not affected EU gas imports.

Senior EU diplomats and officials told the newspaper that despite falling energy prices and record-high gas stocks in EU storage, supplies this winter could be affected by the war between Israel and Hamas and potential acts of sabotage on gas infrastructure.

“We don’t know what will happen this year. We have the situation in Israel, and we don’t know how it will affect imports from the Middle East,” said one EU diplomat to the FT.

They added that the Baltic Sea pipeline, damaged earlier this month, is also a concern, and “it would be good to have insurance.”

At the height of the energy crisis, triggered by Moscow’s cut-off of gas supplies to Europe after Russia started a full-scale invasion of Ukraine in 2022, prices reached over €300 per MWh, but not for long.

Member states eventually agreed that the cap would be triggered if electricity prices exceeded €180 per megawatt-hour for three consecutive days.

In December last year, the Council of the European Union formally adopted a regulation establishing a market correction mechanism to protect citizens and the economy from excessively high prices.