EU countries could not agree on the maximum price to be applied to gas

At the request of the Czech Republic, president of the European Union, the energy ministers of 27 member countries met in an extraordinary meeting in Brussels.

Making a statement at the end of the meeting, Czech Industry and Trade Minister Jozef Sikela stated that they had a very long and difficult meeting and said that no agreement could be reached today on the maximum price to be applied to gas between the member states.

“We tried to agree a package that could be accepted by very different groups of member countries,” Sikela said. he said.

Noting that they included a review in the package in February to assess the positive and negative effects of the maximum price mechanism, Sikela noted that they put forward a proposal that includes automatic deactivation of the mechanism to reassure member countries that have concerns. on security of gas supply and financial stability.

Recalling that natural gas prices peaked in August in Europe, Sikela stressed that they must ensure that this situation does not happen again.

Noting that energy ministers will meet again in Brussels on December 19, Sikela said: “There will only be one issue that we will discuss at the meeting, and that is the price level that will initiate the mechanism.” he used the phrase.

WHAT HAPPENED?

The EU Commission proposed to implement a gas price correction mechanism in the markets last month.

The plan would take effect if the gas futures contract traded on TTF, Europe’s deepest virtual natural gas trading point based in the Netherlands, exceeds 275 euros for two weeks and the megawatt-hour price of gas liquefied natural gas (LNG) in Europe exceeds 58 euros in global markets.

The latest proposal made by the Czech Republic, the EU mandate presidency, to achieve reconciliation between member states, included the introduction of the price ceiling if the price of natural gas exceeded 220 euros per megawatt-hour for 5 days and the difference with the overall LNG prices were 35.

Italy, Belgium, Poland, Bulgaria, Greece, Croatia, Latvia, Lithuania, Malta, Romania, Slovenia and Slovakia did not consider this offer sufficient and wanted the maximum price to be 160 euros per megawatt hour and the difference with the price of LNG 20 euro.

These 12 countries demanded that the measure be implemented in other derivatives markets along with futures markets.

Germany, the Netherlands, Austria, Denmark, Estonia and Luxembourg, on the other hand, stay away from the price ceiling for natural gas.

These countries fear that the application of a price cap will reduce the supply of gas to Europe.

The price of the gas futures contract traded on the TTF amounted to 340 euros per megawatt-hour in August, while today it is trading at 138 euros.

The energy ministers of the EU countries will meet again on December 19 in Brussels.

The measures, including faster authorization of renewable energy projects, have yet to be approved by ministers as no consensus has been reached on a maximum price for natural gas. (AA)