Investing 25-11-2022 15:07 18 Views

A Standoff over Gas Price Cap Puts on Hold EU Measures to Counter Energy Crisis

Another emergency meeting looms next month as EU energy ministers disagree on plans to cap gas prices, criticizing them as ineffective. That means Brussels is pausing efforts to approve a string of measures until mid-December due to haggling over consumption-cutting incentives and impact on supply.

Other policies, such as faster renewable permit processes, limits on intraday price volatility and joint EU gas purchases, are temporarily shelved from long-standing disagreements. The proposed caps at 275 euros per megawatt hour aimed to prevent consumers from paying sky-high prices, but they appeal to only some member states.

Opponents of Fuel Price Cap Demand Approval of All Proposals or Nothing

The 27 EU members are delaying formal approval while agreeing on two policies in principle until another meeting slated for December 13th. However, the cap’s proponents called for all three proposals to be green-lighted. Otherwise, there are to be no approvals in totality.

EU Energy Chief Kadri Simson said:

Ministers have reached a political agreement, but the tool that addresses the price hikes is the one missing piece, I hope we will reach a formal accord in the coming weeks.

The Czech Republic, the holder of the rotating EU presidency, called the council meeting for December 13th. It aims to push through emergency gas supply-sharing plans and joint purchasing before Christmas.

An acute energy crisis has followed the Russia-Ukraine conflict. But while they gave backing to the idea to cap gas prices in late October, several nations demanded concrete safeguards before approving the proposals. A handful of members are claiming that the cap is too high and the ineffectiveness of these interventions.

For Moscow, Disagreements Signal Discord in EU Response to Crisis

It’s a matter of different views on the depth of this cap, so we are putting the champagne bottle in the fridge and still need to open it. That was according to Czech Energy Minister Jozef Sikela, who said the stakes were high since

failure to agree on a deal sends a signal on the disjointed nature of the EU’s response to the energy crisis.

While that’s a blow Europe isn’t keen to embrace, it would also be, to Russia, a political gift. While this disagreement prevails, another scene festers as the bloc continues to disagree on how to curb Moscow’s oil revenues.

An accord couldn’t be negotiated even as deliberations extended late into Wednesday night for the Group of Seven plans, and Thursday’s talks were delayed. The cap is supported by Belgium, Greece, Spain and Poland, while Germany and the Netherlands sit on the fence regarding the measure’s benefits.

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