HomeEconomyThe European Union studies a mechanism to cap the price of gas

The European Union studies a mechanism to cap the price of gas

The European Commission declares itself in favor of extending the gas price control mechanism that is already applied in Spain and Portugal to the 27 Member States. EU leaders will discuss it this Friday in Prague.

The idea of ​​capping gas prices in Europe is gaining ground. The Heads of State and Government of the 27 meet this Friday in Prague for an informal council where energy will be discussed. And for the first time since the beginning of the energy crisis, the European Commission is in favor of a framework for gas prices.

More specifically, the limitation mechanism would only affect the gas used to produce electricity, in a similar way to what is already done in Spain and Portugal. As the two countries are very poorly connected to European energy networks due to their geography, they obtained an exception a few months ago that allows them to regulate the prices of gas used in electricity production. A device that works since prices have dropped.

The idea of ​​the European Commission would be to generalize this mechanism to all 27. Knowing that the gas used to produce electricity still represents 20% of the gas consumed in Europe, this could allow manufacturers to see their bills fall significant.

price brokers

The European Commission hesitated for a long time before making this proposal. In particular due to the hostility of the big European gas buyers, Germany in the lead, who fear that producers will cut their deliveries if prices are too low. But a relative consensus of the 27 seems to have prevailed since then.

In addition to controlling gas prices for electricity production, Brussels wants to establish “price brokers” with the two big winners of the energy crisis in Europe: Norway, which has become the EU’s leading gas supplier (26 % of deliveries, +8 points since the beginning of the year) and the United States (15%).

If the Europeans are very happy that they urgently found these two suppliers to replace Russia, they now want to negotiate with them more reasonable prices than those on the market. A risky bet according to large gas buyers in Europe who fear that Norwegian and American sellers will move away from the Old Continent to sell their gas elsewhere if prices are too low.

On Thursday, Emmanuel Macron said he was ready to negotiate with the two countries: “We will say with great friendship to our American friends, our Norwegian friends, ‘you are great, you provide us with energy, gas, but there is one thing you cannot work for a long time, is that we cannot pay four times more gasoline than what you sell to your industrialists,” he said.

Author: Thomas Sasportas with Paul Louis
Source: BFM TV

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