The executive arm of the European Union, the Commission, has indicated that a price cap on gas imports is not the best approach to containing energy costs amid a worsening cost-of-living crisis across the bloc.
The idea of a price cap on all imports of gas was floated by a group of member states, including Italy, Greece, Poland, and Belgium. The Commission was against the idea from the very start but agreed to discuss it with member states’ leaders.
The discussions have been dragging on for weeks and no decision has been reached. If one is ever reached, it will probably not include a price cap on imports judging by the options that the EU is currently considering. According to sources cited by Bloomberg, these options were presented by the Commission to member states’ leaders on Monday.
In talks last month, there was a proposal for what participants called a dynamic price corridor for imported gas and the Commission had indicated it might be willing to consider this corridor idea. Now, however, the Bloomberg report suggests the executive arm has changed its mind and will push for other measures to tame energy prices.
What this means is that it will take longer for the member states to reach a decision on how to deal with the crisis at a time when a decision needs to be taken as soon as possible so measures can begin to be implemented.
Another challenge is the fact that the group that supports the idea of a gas price cap represents more than half of EU member states and will be very hard to convince to endorse alternative approaches to managing the crisis, of which there aren’t too many: joint gas buying and demand reduction seem to be among the top ones.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.