Energy price spiral could harm EU recovery

"It is hurting our citizens, in particular the most vulnerable households, weakening competitiveness and adding to inflationary pressure. If left unchecked, it risks compromising Europe's recovery as it takes hold," she added.

Gas prices are expected to remain high throughout the winter, according to current demand forecasts. Currently, underground gas reserves are around 70-percent capacity - which was seen by the commissioner as "tight", but "adequate to cover the winter-season needs".

The current situation has prompted several EU governments to take action at national level, capping prices and intervening in markets.

However, some member states are calling to coordinate action at EU level.

The EU Commission is expected to put forward common guidelines next week. But Simson said governments can already implement certain measures, such as providing targeted support to consumers, direct payments to those more at risk of energy poverty, or cutting energy taxes.

"The priority should be to mitigate the social impact, ensuring that energy poverty is not aggravated," she said.

Common gas reserve

The surge in energy prices is a major concern for Spain, which has pushed for it to be on the EU agenda of the next summit on 21 to 22 October.

The EU needs "extraordinary, innovative and robust" measures to tackle this "unprecedented crisis," said Spanish prime minister Pedro Sánchez on Wednesday, before meeting EU leaders for the second day of a summit in Slovenia.

Spain is suggesting to build a "strategic gas reserve" for the whole EU. As with EU vaccine strategy, this idea is based on a common procurement scheme that would enable internal redistribution among member states, if necessary.

Additionally, Madrid has called for a reform of the EU's carbon market.

Under the EU's emissions trading scheme (ETS), based on a cap-and-trade system, a price is put on carbon emissions and emission allowances are then auctioned.

However, according to the chief of EU climate policy, Frans Timmermans, the EU's carbon market is not the problem and "playing around with the emissions trading scheme" would have a "very small" impact on current energy prices.

"The quicker we increase our renewable investments, the quicker we can protect our citizens against price increase," he said on Wednesday.

Manipulation of the market?

Earlier this week, France, Spain, the Czech Republic, Greece, and Romania also called for better coordination of natural gas purchases, arguing that the EU should reduce its "dependency on gas-exporting countries as fast as possible".

The small group of countries urged the EU Commission to investigate why current gas contracts have proven insufficient.

EU lawmakers recently raised similar concerns, calling for an investigation into potential market manipulation.

"We need to identify if there was any kind of market manipulation in EU in recent months. We have to make sure that no state or non-state actor, be it Russian Federation, Gazprom, or anyone else manipulates or influences European energy prices," said MEP Mureşan Siegfried, a Romanian from the centre-right European People's Party, on Wednesday.

For her part, MEP Iraxte García, the leader of the socialists in the EU Parliament, said that many energy exporters were making millions in the current crisis, arguing that Europe cannot be "blackmailed by certain countries".

Last week, Russian firm Gazprom cut by 70 percent its gas exports to the EU via Belarus, according to its own data. The Russian state-owned energy giant has warned that prices could increase further in the winter due to gas shortages.

"Are we being played by Gazprom and Russia?," Dutch Green MEP Bas Eickhout asked on Wednesday, adding that if this "geopolitical game" existed, Europe needed to act on it.

Last month, a group of over 40 MEPs accused Gazprom of manipulating prices, while insinuating that Russia was pressuring Europe to get quick approval of its new Nord Stream 2 pipeline to Germany.