EU considering extending gas price caps – report

Europe is not sure that it makes sense to extend the price ceiling for Russian gas
Europe is not sure that it makes sense to extend the price ceiling for Russian gas

The European Union is currently undecided on whether to keep emergency price caps on imports of natural gas, implemented in February 2023, the Financial Times reported on Oct. 22.

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European concerns are mounting that the conflict in the Middle East, coupled with the lack of deliveries through Baltic pipelines, could lead to a spike in gas prices this winter, according to the report.

The European Commission stated that since the initiation of this measure, there has been "no indication of negative effects" and that gas prices are currently almost 90% lower than in 2022.

“We don’t know what will happen this year,” one EU diplomat told the journalists.

“We have the situation in Israel and we don’t know how that will affect imports from the Middle East.”

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The price cap put into place in February becomes effective if prices exceed EUR 180 ($192) per 1 MWh (roughly EUR 1,850 per thousand cubic meters) for three consecutive days. Right now, the price is below EUR 50 per MWh.

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The European Commission is expected to present a proposal for the EU energy sector in November. It will contain recommendations concerning the price cap, measures to approve new energy projects, and regulations in the gas distribution sector. Voluntary member state commitments to reduce gas consumption by 15% have been extended until March 2024.

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