Page 6 - FSUOGM Week 37 2022

FSUOGM COMMENTARY FSUOGM

EU energy ministers clash over

Russian gas price cap proposal

EU member states have mixed opinions about whether to apply the cap

only to Russian gas or all supplies entering the bloc, and some have voiced
concern that Moscow may retaliate by cutting off flow entirely

EU EU member states have clashed over the Euro- it should apply only to Russian gas supplies or
pean Commission’s proposal to place a price all EU imports. According to The Guardian, a
WHAT: cap on Russian gas supplies, casting doubt on dozen countries including France and Poland
The European whether the measure will be implemented. called for the cap to be imposed on all gas sup-
Commission has The bloc’s 27 energy ministers met on Sep- ply including LNG. However, EU Energy Com-
proposed a price cap on tember 9 to discuss a package of EC proposals missioner Kadri Simson warned that such an
Russian gas supply. aimed at depriving Moscow of revenues to fund approach “could present a security of supply
its war in Ukraine, and ease soaring energy costs challenge,” adding that “nothing is decided” on
WHY: for EU households and businesses. The minis- the proposal.
The move is aimed at ters backed a number of the proposals, including Sikela was more upbeat about the outcome of
depriving Moscow of a windfall tax on generators of non-gas power discussions, noting that there was “a prevailing
revenues and reducing and oil and gas, a bloc-wide reduction in power view of the countries that we need [a gas price
energy costs for the EU. consumption and the provision of “emergency cap] as an emergency measure,” according to
liquidity instruments” to support energy firms The Financial Times. But he warned that more
WHAT NEXT: coping with soaring energy purchase costs, work was necessary to assess the possible impact
The proposal could be according to Politico. because “it is from the market point of view the
rejected as there is a “Today, we managed to agree on a common most difficult case”.
lack of consensus among direction for temporary emergency measures The EU is competing for gas supplies from
member states. and give a clear task to the commission to come other countries such as Qatar, Norway and the
forward with a robust and tangible proposal in a US with Asian markets, Simson noted. The US
matter of days,” Czech Transport and Industry in particular sells significant shares of its gas
Minister Jozef Sikela said in a statement after the supply on the spot market, meaning it has no
meeting. contractual obligation not to divert these sup-
However, ministers sparred over the issue plies to whichever buyer is willing to pay the
of the gas price cap, primarily over whether highest price. The same is true of Norway, but the

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