LEAK: EU debates price cap on Russian gas as row with Moscow escalates

(EurActiv, 5 Sep 2022) As Gazprom further tightened supplies to Europe on Friday, the European Commission responded by outlining two possible instruments to cap wholesale gas prices – one of which would be targeted at Russia only, according to a leaked paper seen by EURACTIV.

The paper will be discussed at a seminar among EU-27 representatives on Wednesday (7 September) and further debated by the bloc’s energy ministers at an extraordinary meeting on Friday.

It outlines “two possible instruments” to cap wholesale gas prices in case of further disruptions – or even a complete shutdown – of supplies coming from Russia.

The first “would involve a price cap on imported gas from Russia”, while the second would see the creation of administrative pricing zones for the most severely affected EU countries, called ‘red zones’.

The paper says both instruments have their pros and cons and are not mutually exclusive. However, it acknowledges that creating regional pricing zones is more challenging to implement and “would require significant regulatory and technical complex preparations”.

Thierry Bros, a Professor at Sciences Po Paris and contributor to Natural Gas World, derided the price cap idea, saying it will be useless once Russian gas exports to Europe drop to zero.

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EurActiv, 5 Sep 2022: LEAK: EU debates price cap on Russian gas as row with Moscow escalates