Meeting of EU ministers on the application of the gas price cap
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The 27 European Energy Ministers will meet on Thursday November 24 in Brussels to try to stop the rise in energy prices after the war in Ukraine, with the aim of limiting gas prices. However, this question has divided Europeans for several months, with Germany in particular fearing the effects on supplies in the coming months.
the gasoline price cap It is one of the options called for since spring by more than half of the States of the European Union. the 27 finished agree a month ago at the European summit, thus wresting from Germany, the Netherlands and Denmark a commitment to a cap… but a partial and limited cap, according to our correspondent in Brussels, pierre benzet.
A month later, the European Commission will propose introducing a cap on the gas price of 275 euros per megawatt-hour (MWh), a mechanism that would apply on January 1 and for a period of one year.
But this device is accompanied by multiple conditions, which makes the implementation of this mechanism very complex and possible only in extreme market conditions. The mechanism must cover all the transactions argues France and the commission must present an operative text.
This mechanism intended to prevent a price spike could be activated under two conditions. First condition: that the gap becomes too big between the world price of natural gas and the European reference price, called TTF. Second condition: that the price per megawatt/hour exceeds 275 euros.
Many countries are, therefore, waiting for a ceiling that represents a true safety net for European consumers to avoid a price rise comparable to that observed last summer, when the price of gas was close to 314 euros per megawatt-hour (MWh).
Insufficient mechanism for France, countries fear overconsumption
This mechanism to limit gas prices is already widely criticized. In France, it is described as inadequate, insufficient or inconsistent. Euphemisms that reflect Spain’s position that the Commission mocks the world with humorous proposals.
Germany, which is the largest gas importer in Europe, continues to be the country that most opposes this mechanism. Several other countries also fear that this cap mechanism will lead to excessive gas consumption due to low prices.
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