Page 13 - EurOil Week 47 2022

EurOil POLICY EurOil

time to implement the plan. limited impact, but once the framework is in
“Poland says they can't go above $30 per bar- place, the price could be lowered at a later point.
rel. Cyprus wants compensation. Greece wants “In our opinion, such a price level is being
more time. It is not going to happen tonight,” one chosen so as to cause as little disruption as
diplomat told Reuters on November 23, refer- possible while the cap mechanisms are being
ring to the talks that took place that day. put in place, but it will likely be lowered later,”
Russia exports around 70-85% of its crude on BCS GM said in a research note. “In any event,
tankers, rather than pipelines, and the price cap we do not think it will work as intended, as the
is primarily targeting these seaborne supplies, by Russian government has made its own clear
prohibiting shipping, insurance and reinsurance statements regarding the price cap, and that is
firms from dealing with Russian crude cargoes that Russian oil will not be exported to coun-
across the world unless they are sold at no more tries that participate in it, regardless of the set
than the price cap. price level.”
Critically, most of the world’s major shipping JP Morgan notes that Russia has already
and insurance firms are based in G7 countries. demonstrated its willingness to curb energy
Analysts at BCS Global Markets note that supplies, after significantly cutting gas flow to
the price ceiling of $65-70 per barrel would have Europe since the start of the war in Ukraine. ™

Czech cabinet to introduce energy

price caps for large companies

CZECH REPUBLIC CZECH cabinet members are discussing the price caps for energy producers based on how
introduction of energy price caps for large much windfall tax will be collected from them.
Prague is looking to businesses in the country. Finance Minister This should apply to energy produced already
protect industry. Zbynek Stanjura (ODS party) told Czech TV since December 1, and will consist of 90% of
that this is going to be a similar measure as the the difference between the selling price and the
energy price caps for households and that the price for MWh stipulated by law.
costs of the measure will be between CZK- Economist Petr Barton said much will
30bn-50bn (€1.2bn-2bn). depend on the real market price. This will
Stanjura said there is no other option. “I determine “how much will have to be col-
expect a quick agreement on the cabinet level if lected to subsidise the difference between the
it turns out that European solution on capping capped price and the real price”, he said, and
energy prices is not possible”, he told Czech TV. explained that the measure complements the
Vice-president of the Union of Industry and windfall tax. “The more government collects
Transportation Radek Spicar said two thirds of on the pricing the less it will collect on the extra
the business federation’s members have prices profits,” Barton was quoted as saying by Czech
capped until the end of this year, but only 20% TV. ™
of them have caps for next year. “It is high time
to approve a solution which would help com-
panies”, said Spicar.
The cabinet would have to notify the
European Commission after agreeing on the
parameters. The opposition says it wants to see
caps on the same level as in Germany
“They want [to cap] €130/MWh there which
is CZK3,250 […] we call on [the government
to cap] at the same level, and not CZK6,000”
as was the case with household and small busi-
nesses caps, ex-minister of trade and industry
from the populist ANO party Karel Havlicek
told Czech TV.
The cabinet wants to cover expenses on the
price caps from the income secured through
windfall tax legislation, which is expected to
be ratified by the Senate this week.
On Friday parliament also approved an
amendment to the energy law which stipulates

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