Monday

23rd May 2022

Calls for EU-wide gas cap, but no collective response

  • The EU’s 27 heads of state and government met for an informal summit in Versailles, France (Photo: fr.wikipedia.org)
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With gas prices surging, calls across Europe have been growing louder for the European Union to mandate a price cap to control the cost of living and safeguard the broader economy.

Benchmark Dutch gas prices briefly hit €345 a megawatt-hour on Monday, 20 times the price of the same contract a year ago.

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But don't hold your breath for a collective response.

Positions among the EU's 27 heads of state and government were a jumble on Thursday, when they met for an informal summit in Versailles, France.

France, the host country for the summit that holds the rotating EU presidency, implemented a national cap on gas prices in October to protect French businesses and citizens.

"There must be a cap, a European ceiling, on wholesale gas prices," Belgian Prime Minister Alexander de Croo told the Belgian daily De Standaard on Thursday.

A cap would set an upper price limit on gas futures markets, preventing prices from rising above a certain ceiling.

"It sounds nice, but we don't support such a price cap," was the blunt assessment by Dutch prime minister Mark Rutte.

Rutte said a price cap on gas would hamper investment in alternatives.

"If you take LNG for example, liquefied gas that we really need from the United States and other parts of the world, it would make it unattractive to export to Europe," he said.

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