The European Commission is unlikely to include an immediate cap on natural gas prices in the emergency measures it is set to propose today. The measures will be designed to ease the energy crisis but EU member states remain divided over the price cap issue, according to a draft document seen by Reuters.
The European Commission is expected to propose a "maximum dynamic price" on the natural gas futures traded at the Title Transfer Facility (TTF), the benchmark for the European gas prices, as a "last resort," the document showed.
The EU is reportedly looking to introduce measures to limit the market volatility of the benchmark European natural gas prices. According to a draft document that Bloomberg News has seen, the European Commission is set to propose measures to limit extreme price spikes in derivatives trading.
There will also be a "dynamic price corridor" for gas trading at other European hubs under the draft proposal Reuters has seen.
Still, no price cap on gas would be part of the latest set of proposals to alleviate the burden of soaring energy prices on industry and households.
Many EU member states have called for a cap on gas prices, but others are not keen on the idea.
A group of 15 members has called on the Commission to implement price caps on all gas imports, both from Russia and from countries such as Norway, Algeria, and the United States. The Commission and some other EU members including Germany and the Netherlands, however, have warned against such a move as it would put the security of supply at risk.
Referring to a price cap on Russian gas, Gazprom's chief executive Alexey Miller said earlier this week that any decision to impose a price cap on Russian natural gas exports would result in the suspension of said exports.
"Such a one-sided decision is of course a violation of existing contracts, which would lead to a termination of supplies," Miller said on Russian TV, as quoted by Reuters.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More