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EU Energy Ministers press on gas price cap despite falling prices

Published 25/10/2022, 12:37
© Reuters.  EU Energy Ministers press on gas price cap despite falling prices
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European ministers are meeting to debate how a potential limit on the price of gas would work, something that is widely expected to be the blueprint for a price cap in the UK.

Germany backed down on its opposition to the suggested temporary bloc-wide cap last week but a new concern that demand might soar if the cap is introduced has thrown in another stumbling block.

Fears that non-EU countries, ie Britain, might benefit from the subsidy have also slowed the process.

Approval by the European Commission is currently being sought to draft a firm proposal for the limit, but this requires confirmation from EU member nations, which could possibly be granted after the talks on Tuesday.

According to the commission, if gas prices were €180/MWh (£156), the same as the proposed revenue cap on renewable electricity generators, inflation could be tamed as Europe would see a net benefit of €13bn (£11.3bn).

Gas prices have fallen across Europe recently, with prices dropping as low as €93/MWh (£81) on Monday due to replenished stocks and mild weather, however, this is still higher than pre-Ukraine war levels and fears of mid-winter price spikes mean discussions over a cap continue.

Previously, the European Commission said: “While the EU has made strong progress on filling its gas storage for this winter, achieving over 92% filling as of today (18 October), we need to prepare for possible further disruption, and lay a sound foundation for the following year.”

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