Monday

29th Nov 2021

Exclusive

MEPs suspect Gazprom manipulating gas price

  • The Nord Stream 2 pipeline has been finished - but does not comply with EU energy market regulations (Photo: www.south-stream.info)
Listen to article

European gas prices have risen by more than 170 percent since the start of this year - raising concerns for worsening energy poverty.

On Friday [17 September], the European Commission said it "monitored" the situation in a press conference.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The commission said that a global increase in gas demand had caused prices to spike.

But 42 MEPs, ranging from the Greens, through the EPP, S&D and Renew Europe, to ID on the right, suspect that the Russian gas giant Gazprom is manipulating market prices and sent a letter on Thursday asking the commission to open an investigation.

According to the letter - seen by this website - Gazprom has refused to guarantee additional volumes of supply "despite available information that Gazprom has sufficient production capacity."

The signatories also raised suspicion that Gazprom is pressuring Europe to agree to an immediate launch of the Nord Stream 2 pipeline, despite its non-compliance with EU energy market regulations.

While speaking at an online conference, Alexei Miller, the head of Gazprom, warned that natural gas prices in Europe will in fact rise even further - but said that was due to low storage levels.

When quizzed on Friday, the commission said it had received the letter and would look into the matter. However, when pressured further, the representative did not want to go into detail.

The EU has, however, accused Gazprom of market manipulation in the past.

Lower renewable prices?

Meanwhile, higher prices are reverberating through other parts of the economy.

On Friday, Yara, the second-biggest producer of fertiliser globally, and with large production bases in the EU, announced it would reduce its ammonia production by 40 percent due to the current high gas prices. Ammonia is used to produce ammonium nitrate, which is a widely-used fertiliser.

Of 4.9m tonnes of ammonia produced in Europe, the company said it planned to reduce production by approximately 2m tonnes in the Netherlands, Italy, the United Kingdom and France - which in turn might affect food prices.

Household energy prices have also begun to rise.

In Spain, a megawatt-hour of electricity has increased from €46 to €154 in a year, prompting the Spanish government to intervene in the energy market and lower taxes on gas and electricity.

Commission vice president Frans Timmermans was critical of this plan: "You can't just do that," he said on Wednesday. "The free energy market is the basis on which we base our energy prices."

But according to the think tank Bruegel, major gas-price increases do pose a problem for European countries. Higher prices affect low-income households and member states disproportionately.

According to Eurostat, 30 percent of people in Bulgaria cannot afford to keep their house warm. In total, 34m people suffer from what is called 'energy poverty.'

Rising gas prices will exacerbate this.

While temporary measures like direct payments to citizens can help cushion the effects of the current high prices, Bruegel says that European leaders can avoid future prices hikes structurally - by committing to renewable energy.

EU energy commissioner Kadri Simson also mentioned renewable energy as a way to stabilise prices.

But Bruegel writes that governments have not yet committed enough to green energy: "Clearer commitments from governments will imply growing electricity demand. As a result, investors will not have to worry about over-investing in low-carbon power systems."

Opinion

Nord Stream 2: Gazprom's desperate moves

Gazprom's argument - that the application of the directive is discriminatory and retroactive - looks more like a desperate grasping at legal straws.

Spain wants energy price discussion at next EU summit

Spain wants to discuss the current energy price spike at the next EU summit in October, and called on the European Commission to provide member states with guidance on how to react to current record gas and electricity prices.

Energy price spiral could harm EU recovery

Sky-high energy prices could undermine the EU's post-corona economic recovery, the EU Commission has warned, as EU states and MEPs called for joint action and fair play.

News in Brief

  1. Covid variant: EU to block travel from southern Africa
  2. France and UK seek EU help on Channel migrants
  3. New Swedish PM who resigned after 7 hours gets second chance
  4. Belgium to decide on Friday on Covid measures
  5. UK rings alarm on new Covid strain in South Africa
  6. Turkish police use tear gas at women's rights march
  7. Poland calls for more Nato troops
  8. Ex-Navalny aide leaves Russia

EU watchdog: no proof of carbon market manipulation

The EU watchdog has found no proof of manipulation of the carbon markets, allaying European Commission fears. However, the European Securities and Markets Authority did note that it had only limited access to essential data.

Stakeholders' Highlights

  1. Nordic Council of MinistersNew report reveals bad environmental habits
  2. Nordic Council of MinistersImproving the integration of young refugees
  3. Nordic Council of MinistersNATO Secretary General guest at the Session of the Nordic Council
  4. Nordic Council of MinistersCan you love whoever you want in care homes?
  5. Nordic Council of MinistersNineteen demands by Nordic young people to save biodiversity
  6. Nordic Council of MinistersSustainable public procurement is an effective way to achieve global goals

Latest News

  1. Belgium goes into three-week 'lockdown light'
  2. MEPs list crimes of 'Kremlin proxy' mercenaries
  3. EU to open up 'black box' of political ads
  4. Can the ECB solve climate change and inflation on its own?
  5. EU set to limit vaccine certificate to nine months
  6. Surprise coalition in Romania without former Renew's Ciolos
  7. This 'Black Friday' is a turning point in corporate accountability
  8. West struggling to show strength on Ukraine

Join EUobserver

Support quality EU news

Join us