Wealthier EU Member States oppose price cap on gas

Wealthier EU Member States oppose price cap on gas
LNG-terminal (liquefied natural gas). Credit: Belga / Kurt Desplenter

EU Member States are currently discussing capping prices on gas imports, and while Belgium and other Member States continue to push for a maximum price for gas in Europe, Germany, the Netherlands and Denmark continue to oppose it.

Energy prices have been rising since last year autumn and the effects are being increasingly felt, leading to EU ministers agreeing on a price cap for all gas imports. The proposal was then sent to the European Commission, where it was faced with opposition and a decision has still not been made.

Reports suggest there is a growing divide between wealthier EU states who are in opposition to a cap, putting them at odds with the Member States that would greatly benefit from a price cap.

A letter was sent on Tuesday 27 September to European Energy Commissioner Kadri Simson with, once again, a single key message: a price cap on gas is needed to reduce energy prices for consumers and businesses.

More than 10 countries, including Malta, Romania, Croatia, Latvia, Sweden, Slovenia and Portugal, have already signed the letter, reported De Standaard. "This is another attempt to put pressure on the European Commission and speed up the process," said a European diplomat.

According to the letter, "the price cap should cover all gas transactions and not be limited to imports from specific countries."

Addressing Member States' concerns on the security of supply, the letter said the cap "can be designed to ensure the security of supply and free flow of gas within Europe as well as achieving our objective of reducing gas demand. This price cap is the priority."

However, it is unlikely that the Commission will set a concrete proposal on the table in time for the emergency summit of EU energy ministers on Friday.

Based on the outcome of the meeting, the Commission will work on legislative proposals. "More consultation is needed, internally and with member states, before it can become concrete," a Commission source said.

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So far, 13 Member States are in favour of the price cap. However, it seems the wealthier EU countries are the ones standing in opposition.

Chancellor Olaf Scholz, for one, remarked that Germany has already spent a lot of money to secure expensive bilateral LNG (liquefied natural gas) contracts and should the price cap effectively cut costs, the German people would demand to know why they had paid a higher price.

According to Berlin, The Hague and Copenhagen, it is no coincidence that the call for a price cap comes mainly from Member States with little budgetary room to finance measures themselves

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