Dozens of Countries Efforts to Reduce the Proposed Gas Price Cap by the European Union

Dozens of countries, including Belgium, Italy, Poland, and Slovenia, are making efforts to "significantly" reduce the proposed gas price cap by the European Union as part of attempts to reach an agreement on the issue, Reuters reports.

This year, gas prices in Europe have surged sharply after Russia reduced gas supplies, exacerbating fuel prices and inflation. On Saturday, EU member states held urgent negotiations, trying to come to an agreement on the price cap ahead of the energy ministers’ meeting scheduled for December 13, but countries remain divided over the plan.

An official from one EU member state stated that countries are "ironing out disagreements" in their positions, while others say that little progress was made during Saturday’s discussions. Additional negotiations will take place on Monday.

Twelve of the EU’s 27 member states have circulated a document demanding a "significant" reduction of the price cap, stating that the proposed adjustment in the text is not considered a compromise. The document, which was made known to Reuters, was presented by Belgium, Bulgaria, Croatia, Greece, Italy, Latvia, Lithuania, Malta, Poland, Romania, Slovenia, and Slovakia.

EU member states have been arguing for months over gas price limits but have so far been unable to bridge the gap between their disagreements. Some diplomats do not believe that an agreement will be reached next week, noting that countries dissatisfied with the latest proposal have sufficient support to block its approval.

Meanwhile, proponents of price caps argue that this solution will protect their economies from high energy costs. Germany, Europe’s largest economy and gas market, and the Netherlands oppose it, warning that it could disrupt the seamless operation of energy markets and deter gas producers from sending the much-needed fuel to Europe.

According to the draft of the latest proposal being discussed by countries, the cap would come into effect if prices exceed €220 per MWh under the Dutch Title Transfer Facility (TTF) contract, as well as the LPG reference price above €35. Current estimates for natural gas prices based on LNG prices are below the European Commission’s proposed €275/MWh, but the twelve countries have indicated that it is still not low enough.