The European Commission told countries at a Monday seminar this week that there was no way to create a gas price cap as previously requested by EU leaders.
Instead, the EC has proposed a "market correction mechanism."
Earlier on Tuesday, it was revealed that after the gas price cap discussions had been dragging on for weeks, with no decision reached-and that whatever agreement was finalized, it would probably not include a price cap on imports, based on the options the EC was currently considering. But while it was unlikely as of Tuesday morning, it is decided less likely now-impossible, in fact, according to new Reuters sources described as diplomats.
According to the EC, there is no way to cap the price of gas that would not affect existing long-term contracts.
The original idea of a price cap on gas imports into the European Union was originally suggested by several EU members, including Belgium, Greece, Italy, and Poland. The European Commission-the executive arm of the European Union-was never in favor of the gas price cap idea.
However, it did agree to discuss it with member states' leadership, and indeed it did-for weeks, in fact. The EC has now concluded from those talks, however, that there was no way to implement a gas price cap in a way that would preserve existing long-term contracts.
A market correction mechanism is now being considered in its place.
More than half of the EU member states supported the gas price cap idea. The other options for mitigating Russia's revenues from the sale of natural gas without Europe freezing that were already on the table were a joint gas buying agreement and a reduction in gas demand.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More