EU countries are still not clear on the price ceiling for gas, they are negotiating about 220 euros

These days, the Czech presidency of the bloc is trying to unify the view of the so far divided countries of the European Union on the possible introduction of a price ceiling in the event of a significant increase in the price of gas. The ambassadors of the member states have an amended proposal on the table, according to which the highest price for gas sold on the key Title Transfer Facility (TTF) virtual market could be 220 euros (roughly 5350 CZK) per megawatt hour instead of the 275 euros originally intended by the European Commission (EC).

A group of countries, led by Germany, continues to show opposition to any price cap. According to the diplomats, it is therefore possible that the agreement will not be concluded again at the extraordinary meeting of energy ministers next Tuesday. EC President Ursula von der Leyen declared on Wednesday that, according to her belief, the countries will agree on the shape of the ceiling by the end of the year.

The European 27 has been trying to agree on a plan to limit gas prices, whose recent rise in price has led to an increase in electricity prices, since the end of the summer. In August, more than 300 euros were paid for futures contracts for the next month on the TTF, and most countries started calling for the highest price to be set. The commission came up with the first proposal in mid-November, but a large part of the countries called it unusable and some politicians talked about it as a bad joke. Because of the additional conditions, the EU would not start applying the ceiling even during the summer’s record price hike.

The current text takes into account the mentioned price as well as the relaxation of other conditions for the automatic activation of the ceiling. Instead of the original 58 euros, the price of gas in the TTF would have to exceed the world average of liquefied natural gas (LNG) prices by only 35 euros. In order to introduce a cap, it would be enough for these extraordinary circumstances to last five days instead of two weeks.

Countries such as France, Spain, Italy and Poland are calling the loudest for the introduction of the ceiling, some of which demanded a reduction in the values ​​from the original proposal. On the other hand, Germany, the Netherlands and the Nordic countries do not want to intervene in the energy market, because they fear an unwanted increase in consumption and a threat to supplies.

The ambassadors’ meeting is scheduled to end in the evening, and it is not yet clear what support the proposal will receive. However, diplomats are already talking about the fact that another of the extraordinary ministerial meetings convened by the Czech Minister of Industry Jozef Síkela may end in a stalemate again next Tuesday, and another meeting will follow. Due to disagreements over the ceiling, the EU has not yet formally approved other emergency measures, such as joint gas purchases or solidarity provision of supplies to countries in need.