The European Union is “ready to discuss” a cap on wholesale gas prices to lower the cost of electricity, European Commission president Ursula von der Leyen said on Wednesday.
Ms von der Leyen said more EU countries than before were open to the idea after Europe’s energy squeeze became more critical.
She is expected to set out proposals on reducing electricity costs in a letter to the EU’s 27 leaders before they meet in Prague on Friday. They will take part in a wider pan-European summit on Thursday.
“High gas prices are driving electricity prices. We have to limit this inflationary impact of gas on electricity everywhere in Europe,” Ms von der Leyen told the European Parliament.
“This is why we are ready to discuss a cap on the price of gas that is used to generate electricity.”
Her spokesman Eric Mamer subsequently clarified that Ms von der Leyen was suggesting a cap on wholesale prices on the European market, rather than a direct cap on imports.
The cap would not be limited to Russian gas. EU countries separately on Wednesday agreed to enforce a price cap on Russian oil by denying transport and insurance to cargoes that flout the limit.
Ms von der Leyen acknowledged concerns from some member states, including Germany, that a price cap on gas would further squeeze Europe’s scarce energy supplies.
“We don’t support an absolute maximum, a price cap, because there is a danger that we can no longer buy enough gas on the world market,” a German government spokeswoman said last week.
But Ms von der Leyen said any cap would be a temporary solution while wider changes are made to the electricity market.
These would include replacing the benchmark TTF gas price with one that better reflects Europe’s energy mix, she said.
High gas and electricity prices have forced several European governments into expensive bailouts to protect consumers from runaway winter bills.
In another move to reduce prices, EU countries will be encouraged to jointly “step up our negotiations” with gas exporters such as Norway and the US.
Member states agreed in March on the principle of voluntary joint purchasing, an idea compared by officials to the EU-wide acquisition of coronavirus vaccines.
“As the European Union, we have considerable market power. And many of our suppliers want to conclude deals with us, which are beneficial for both sides,” Ms von der Leyen said.
“We have to avoid a scenario where member states are again outbidding each other on world markets and driving prices up for Europe.”
RESULTS
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Winner: AF Majalis, Tadhg O’Shea (jockey), Ernst Oertel (trainer).
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6pm: Maiden (PA) Dh 80,000 (T) 1,400m
Winner: Foah, Fabrice Veron, Eric Lemartinel.
6.30pm: Wathba Stallions Cup Handicap (PA) Dh 70,000 (T) 1,400m
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7pm: Handicap (PA) Dh 80,000 (T) 1,600m
Winner: RB Dixie Honor, Antonio Fresu, Helal Al Alawi.
7.30pm: Rated Conditions (TB) Dh 100,000 (T) 1,600m
Winner: Boerhan, Ryan Curatolo, Nicholas Bachalard.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
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More on Quran memorisation:
More coverage from the Future Forum
Mohammed bin Zayed Majlis
TYPES%20OF%20ONLINE%20GIG%20WORK
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The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
