Page 6 - FSUOGM Week 40 2022
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FSUOGM COMMENTARY FSUOGM
EU members still fail to see eye to
eye on gas price cap
Member states have conflicting about how the gas price cap should work in practice.
EU EU member states met again on September 30 Kadri Simson made clear there was still no con-
to discuss imposing a price cap on gas imports, sensus on this issue.
WHAT: but there is still little consensus on what form the “We will … try to negotiate a price corridor,
EU member states have measure would take. not a fixed cap, that allows us to bring down the
been unable to agree on a Energy ministers from the 27 states approved costs for our consumers,” she said at a news con-
gas price cap. levies on energy firms’ windfall profits, to help ference. “A wholesale gas price is a legitimate
raise funds to shield households and companies option, but it requires a radical intervention in
WHY: from soaring costs. The agreement includes a the market.” She added that several “non-nego-
France and Italy are levy on fossil fuel companies’ surplus income tiable conditions” would need to be introduced
among those that want made this year or next, and a second one on the for the price cap to work.
a blanket cap on all excess revenues of low-cost power producers
imports, while Germany – namely those that do not use natural gas as a Disagreement
wants governments to feedstock. The members also agreed to introduce Germany, one of the countries hardest hit by
subsidise supplies. a mandatory cut on power use during peak price cuts in Russian gas supply to Europe, has said
periods. it is opposed to an EU-wide price cap on gas
WHAT NEXT: Some countries feel this is still not enough to imports. At a government conference in Berlin
A blanket cap imposed on adequately address the energy crisis, and some on September 30, a spokesperson for Germany’s
suppliers could prompt have called on the European Commission to economy ministry said that it instead favours
them to divert their propose capping the price of gas imports. Speak- a gas price “brake”, whereby governments set
shipments. ing after the meeting, EU Energy Commissioner a gas price and then cover the difference to the
P6 www. NEWSBASE .com Week 40 06•October•2022