EU member countries discuss the imposition of the price cap on gas
Facts:
1) Following the Russia-Ukraine war and subsequent drop in the gas supply, the gas prices in the EU soared.
2) The
emergency cap* on the price of gas (on
imports and at the EU's main trading exchange) was offered in order to protect businesses and households.
3) The European Commission pointed out conditions at which the price cap can be imposed: the flow of gas among EU states is constant and gas consumption does not increase due to the cap.
4) The European Commission published proposals for the companies to pool* the gas demand and hence purchase it altogether.
5) Nevertheless, during the last few days, gas prices in Europe declined to their minimum since late June.
Analysis:
1) Germany and Netherlands opposed the price cap’s imposition, arguing that it would increase consumption, exacerbating
scarcity.
2) The pooling of gas demand of EU countries is needed to negotiate better prices, as members would stop bidding against each other. Therefore, access to gas would be simplified, especially for smaller countries.
3) The decrease in the gas price in recent days is due to the forecasts for favorable autumn weather.
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