EU balks on gas price cap – Bloomberg

The bloc is planning to propose measures to ease the energy market this week, the news outlet reports citing a draft document

The EU will refrain from introducing a price limit on natural gas immediately, Bloomberg reported on Tuesday citing a draft proposal from the European Commission.

According to the news outlet, the proposal lists measures aimed at easing the region’s volatile energy market and tackling the energy crisis.

“This is the moment to act, for this winter and beyond… The current situation causes economic and social hardship, placing a heavy burden on citizens and on the economy. Rising energy costs are leading to reduced purchasing power for citizens and loss of competitiveness for companies,” the draft states, as cited by Bloomberg.

The package will reportedly offer ways for EU countries to use state aid to deal with the impact of high energy costs on companies and households, in a volume of up to €40 billion from the bloc’s cohesion funds.

Member nations will also be offered a common purchase platform which would coordinate filling gas reserves. States would be expected to jointly buy enough gas to fill at least 15% of their storage and energy firms will be allowed to form a European consortium to negotiate long-term contracts.

Read more

The draft also proposes placing price limits on transactions on the Dutch TTF trading hub, but only “as a last resort” and upon permission from national governments.

Another tool aimed at stemming gas-price volatility would be the requirement for trading hubs to launch a 'temporary intra-day price cap mechanism' for electricity and gas, enabling them to set a limit on how high spot prices can go up throughout the day.

The draft proposal will reportedly be discussed by EU leaders at a summit on October 20-21, while its specifics are to be cleared by energy ministers when they meet in Luxembourg next week.

For more stories on economy & finance visit RT's business section