# EU countries spar over gas price cap Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-09-30 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: EU Energy Crisis: Disagreement Over Gas Price Cap Meta Description: Discover the latest on European Union countries' debate over capping gas prices to tackle the energy crunch, with varying opinions and proposals on the URL: https://financedigest.com/eu-countries-spar-over-gas-price-caphtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-09-30t051017z3lynxmpei8t05qrtroptp4ukraine-sanctions-eu-sanctions-vonderleyen-1736815113213-compressed.jpg) By Kate Abnett, Gabriela Baczynska and Philip Blenkinsop BRUSSELS (Reuters) – European Union countries disagreed on Friday about whether and how to cap runaway gas prices, with Germany among those opposing the measure that 15 other states said was needed to tackle Europe’s energy crunch. Meeting in Brussels on Friday, ministers from the 27 EU member states approved levies on energy firms’ windfall profits to try contain an energy price surge aggravated by Russia’s war against Ukraine. The agreement covers a levy on fossil fuel companies’ surplus profits made this year or next, another levy on excess revenues low-cost power producers make from soaring electricity costs, and a mandatory 5% [cut in electricity use during peak price](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") periods. The Czech Republic said, however, that was not enough and that many EU [countries expected a proposal from the bloc’s executive European](https://www.financedigest.com/four-european-countries-call-for-special-treatment-of-defence-in-eu-debt-rules-document.html "Four European countries call for special treatment of defence in EU debt rules – document") Commission on capping the gas price. Speaking after the meeting, the EU’s [energy commissioner Kadri Simson said there was no agreement](https://www.financedigest.com/petrofac-hitachi-energy-receive-14-billion-agreement-from-tennet.html "Petrofac, Hitachi Energy receive billion agreement from TenneT") on what such a cap would look like. “We will… try to [negotiate a price](https://www.financedigest.com/bristol-myers-pfizer-abbvie-drugs-likely-to-face-u-s-price-negotiation.html "Bristol Myers, Pfizer, AbbVie drugs likely to face U.S. price negotiation") corridor, not a fixed cap, that allows us to bring down the costs for our consumers,” she told a news conference. A wholesale gas price is a legitimate option, but it requires a radical intervention in the market,” she said, adding that several “non-negotiable conditions” would need to be put in place alongside such a [cap for it to work](https://www.financedigest.com/eu-sees-more-work-ahead-to-implement-russian-oil-price-cap.html "EU sees more work ahead to implement Russian oil price cap"). Italy’s [energy minister](https://www.financedigest.com/exclusive-norway-eyes-high-gas-output-until-2030-says-energy-minister.html "Exclusive-Norway eyes high gas output until 2030, says energy minister") said a group of countries will discuss among themselves next week ideas for a cap or “smart indexing” to help the Commission draft a legal proposal that all countries can support. “The priority right now is to slash the price of gas. But there is a second priority: to avoid that this kind of action [leads to a shortage](https://www.financedigest.com/budget-cuts-staff-shortages-and-cyber-threats-keep-it-leads-awake-at-night-as-gdpr-looms.html "Budget Cuts, Staff Shortages and Cyber Threats Keep IT Leads Awake at Night as GDPR Looms") of gas,” Roberto Cingolani said. Fifteen countries, including France, Italy and Poland, this week asked Brussels to propose a [price cap on all wholesale gas transactions to contain inflation](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"). The [cap should be set at a 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") that is “high and flexible enough to allow Europe to attract the required resources”, they said. ‘STOP THIS INFIGHTING’ The commission warned countries this week that a broad cap would require “significant [financial resources” to finance emergency gas purchases should market prices](https://www.financedigest.com/biggest-uk-house-price-fall-recorded-since-financial-crisis.html "Biggest UK house price fall recorded since financial crisis") break the EU’s cap. Denmark, Austria and the Netherlands sided with Germany in opposing the idea, which they said could leave [countries struggling to buy gas if they cannot compete with buyers](https://www.financedigest.com/buyers-shun-city-centres-for-country-villas-when-it-comes-to-lifestyle-investment-in-iberia.html "BUYERS SHUN CITY CENTRES FOR COUNTRY VILLAS WHEN IT COMES TO LIFESTYLE INVESTMENT IN IBERIA") in price-competitive global markets. Brussels suggested the EU could move ahead with a narrower [price 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"), for example by just capping Russian gas supplies, but countries including Belgium and Hungary were against. Another idea, akin to what [Spain was already doing at home](https://www.financedigest.com/foreign-investment-spain-hits-5-year-high-costa-del-sol-winning-second-home-buyers.html "Foreign investment in Spain hits 5-year high, with Costa del Sol winning over second home buyers"), was to target specifically gas used for power generation. By introducing EU-wide [measures Brussels hopes to overlay governments’ uneven national](https://www.financedigest.com/national-cinemedia-releases-first-cinema-attention-measurement-study-conducted-by-lumen-in-collaboration-with-dentsu.html "National CineMedia releases first cinema attention measurement study, conducted by Lumen in collaboration with dentsu") approaches to the energy crunch, which have seen richer EU countries far outspend poorer ones in handing out cash to ailing companies and consumers struggling with bills. Germany, Europe’s biggest economy, set out a 200 billion euro package on Thursday to tackle [soaring energy costs](https://www.financedigest.com/amazon-other-retailers-revamp-free-shipping-as-costs-soar.html "Amazon, other retailers revamp ‘free’ shipping as costs soar"), including a gas price brake. Claude Turmes, energy minister of Luxembourg, urged a stop to the “insane” spending race between [countries to shield their economies from the energy price](https://www.financedigest.com/netflix-cuts-prices-in-some-countries-to-boost-subscriptions-shares-drop.html "Netflix cuts prices in some countries to boost subscriptions, shares drop") spike. That’s the [next frontier](https://www.financedigest.com/the-next-frontier-of-payments.html "The next frontier of payments"), to get more solidarity and to stop this infighting,” Turmes said.($1 = 1.0182 euros) (Reporting by Kate Abnett and Gabriela Baczynska, Philip Blenkinsop, Bart Meijer, Marine Strauss, Alvise Armellini and John Chalmers) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---