ELS #Energy - In a rush for imported gas price cap

While tensions and discussions for a price cap on imported gas continue, the Parliament seems to have made the decision to finally go for it.

President Ursula von der Leyen announced yesterday before the Parliament, under ongoing pressure from some Member States, that a price cap on gas could be a temporary solution to the current energy crisis while lawmakers work on a new price index that ensures a better functioning of the market and reflects the growing importance of LNG. Following her speech, the Parliament called on the Commission to propose an appropriate price ceiling on gas imports from pipelines, mainly from Russia.

The risk for Europe’s security of supply is still there, and the lack of experience from EU bodies in handling gas flows administratively still backs out the measure to some extent. However, we could have a price cap on imported gas sooner than later, albeit a more drastic demand reduction framework should be necessary for the measure to work, according to the non-paper released by the Commission last week.

Meanwhile, tensions continue to rise as some Member States maintain their positions against the measure amid EU institutions work for avoiding divisive unilateral actions and call for unprecedented solidarity.

Heads of State are already in Prague for an informal Council meeting and are expected to tackle the issue during their roundtable discussions today.

ELS will be carefully following the outcome of today’s meeting and will be waiting for a Commission’s proposal on a price cap on imported gas.

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