• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 1 day GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days Does Toyota Know Something That We Don’t?
  • 5 days World could get rid of Putin and Russia but nobody is bold enough
  • 2 days America should go after China but it should be done in a wise way.
  • 7 days China is using Chinese Names of Cities on their Border with Russia.
  • 9 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 9 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 9 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 8 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 9 days Putin and Xi Bet on the Global South
  • 9 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 10 days United States LNG Exports Reach Third Place
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs

EU Regulator Warns Gas Price Cap May Not Work As Intended

The EU’s price cap on natural gas is an untested tool that may not work as intended to prevent gas price spikes for European households and businesses, the head of the European Union Agency for the Cooperation of Energy Regulators (ACER) told the Financial Times

The gas price cap is “a difficult creature. It’s unprecedented, it’s untested,” ACER’s director Christian Zinglersen told FT after the EU energy ministers agreed to set a cap on the benchmark EU gas price as of the middle of February 2023.    

Zinglersen also noted that he would be “reluctant to rely on this gas price cap” to protect EU consumers from price spikes. 

After months of negotiations, the EU finally agreed on Monday to set a price cap on natural gas to protect consumers from excessive price spikes and limit inflationary pressure and industrial damage to European economies.

On Monday, EU energy ministers reached a political agreement on a regulation that sets a so-called “market correction mechanism”, which would come into force on February 15, 2023.  

The market correction mechanism will be triggered if the month-ahead price on the Title Transfer Facility (TTF), Europe’s key benchmark, exceeds $191 (180 euros) per MWh for three working days, and the month-ahead TTF price is $37 (35 euros) higher than a reference price for LNG on global markets for the same three working days.

However, if risks to the security of supply occur, the European Commission will suspend the price cap rule, the EU agreed.  

The price cap could limit Europe’s capacity to continue to draw most of the global spot LNG supply, analysts say.

ADVERTISEMENT

Some EU member states such as Germany and the Netherlands had reservations about a price cap, concerned that a market intervention and a ceiling on prices would take away Europe’s key advantage in attracting LNG supply—higher prices than in Asia. Germany agreed to back the price cap only after the EU also agreed to accelerate permitting rules for renewable energy projects, according to EU officials.    

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News