# EU countries consider lower gas price cap – documents
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-12-02
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: EU countries to consider gas price cap proposal amid rising
Meta Description: European Union countries to discuss revised gas price cap proposal aiming to cushion economies from price spikes and ensure stable gas prices.
URL: https://financedigest.com/eu-countries-consider-lower-gas-price-cap-documentshtml

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By Kate Abnett

BRUSSELS (Reuters) -European Union countries will consider on Friday a proposal for a gas price cap slightly lower than a Brussels proposal that some view as too high, with a handful of countries pushing for an even lower limit, documents seen by Reuters showed.

European Union countries start negotiations on Friday evening on a European Commission proposal for a cap to limit gas price spikes, and are racing to reach a deal by Dec. 13.

The Commission last week proposed a gas [price cap that would kick in if the front-month Title Transfer Facility (TTF) gas price exceeded 275 euros](https://www.financedigest.com/euro-zone-inflation-eases-in-feb-but-core-prices-pick-up.html "Euro zone inflation eases in Feb but core prices pick up") ($289) per megawatt-hour for two weeks and was 58 euros higher than a liquefied natural gas reference price for 10 days.

Some countries criticised that proposal, suggesting it was designed with such a high [price and with criteria so strict that the cap](https://www.financedigest.com/oil-prices-rise-after-opec-keeps-output-steady-russian-price-cap-imposed.html "Oil prices rise after OPEC+ keeps output steady, Russian price cap imposed") would never be triggered, and thus fail to cushion their economies from price spikes.

On Friday, countries will consider a revised proposal by the Czech Republic, which holds the rotating EU presidency, to lower the limit to 264 euros/MWh and require [prices to remain above that level](https://www.financedigest.com/g7-finance-chiefs-agree-on-russian-oil-price-cap-but-level-not-yet-set.html "G7 finance chiefs agree on Russian oil price cap but level not yet set") for five trading days, instead of two weeks, to trigger the cap.

The revised proposal, seen by Reuters, would also [extend the cap to cover not only the front-month gas contract](https://www.financedigest.com/the-tall-group-extends-partnership-with-santander-with-new-scanner-contract.html "The Tall Group Extends Partnership With Santander With New Scanner Contract"), as Brussels proposed, but contracts with expiry dates as far forward as a quarter-year.

With countries split over whether to [cap prices](https://www.financedigest.com/factbox-u-s-offers-new-details-on-plan-to-cap-russian-oil-prices.html "Factbox-U.S. offers new details on plan to cap Russian oil prices") at all, diplomats expect multiple revisions of the proposal will be needed before any deal is struck.

At least five [countries are pushing for an even lower cap](https://www.financedigest.com/eu-countries-spar-over-gas-price-cap.html "EU countries spar over gas price cap").

In a document [shared with other countries this week](https://www.financedigest.com/shares-and-bonds-nervy-as-rate-hike-week-looms.html "Shares and bonds nervy as rate-hike week looms"), Italy, Poland, Greece, Belgium and Slovenia proposed two options: either a far lower fixed price cap of 160 euros/MWh, or a “dynamic price cap” with a value that was 75% fixed and 25% fluctuating in response to existing liquefied natural gas price benchmarks.

Another proposal by Spain suggested a fully-fluctuating price cap, based on [average LNG prices](https://www.financedigest.com/taylor-wimpey-espana-remain-cautiously-optimistic-as-average-selling-price-increases-by-20-4.html "Taylor Wimpey España ‘remain cautiously optimistic’ as average selling price increases by 20.4%") plus a price premium and applied to “all future products” on the TTF.

A handful of countries including Germany and the Netherlands, however, warn capping [prices could make it harder for Europe](https://www.financedigest.com/tesla-expands-discounts-with-price-cuts-in-europe-singapore-israel.html "Tesla expands discounts with price cuts in Europe, Singapore, Israel") to attract much-needed gas supplies from global markets.

EU gas [prices have soared this year as Russia slashed gas deliveries](https://www.financedigest.com/tesla-posts-record-quarterly-deliveries-after-price-cuts-up-4-from-q4.html "Tesla posts record quarterly deliveries after price cuts, up 4% from Q4") to Europe following its invasion of Ukraine. But while EU countries have already [agreed a raft of emergency energy](https://www.financedigest.com/exclusive-repsol-agrees-to-sell-alberta-oil-assets-to-cppib-backed-teine-energy-sources.html "Exclusive-Repsol agrees to sell Alberta oil assets to CPPIB backed-Teine Energy -sources") measures, including requirements to fill gas storage before winter, some diplomats were doubtful a deal could be struck by a Dec. 13 meeting when EU countries’ [energy ministers aim](https://www.financedigest.com/varo-energy-buys-80-of-dutch-biogas-firm-aims-to-double-capacity-by-2026.html "Varo Energy buys 80% of Dutch biogas firm; aims to double capacity by 2026") to approve it.

($1 = 0.9510 euros)

(Reporting by Kate Abnett; Editing by Edmund Klamann and Louise Heavens)


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