European Union member states will on Monday discuss a gas-price cap that’s almost one-third lower than an original proposal as they attempt to break a deadlock over the controversial proposal to contain the impact of a historic energy crisis, Bloomberg reported.
The Czech government, which holds the EU’s rotating presidency, suggested lowering the ceiling to €188 euros per megawatt-hour compared with the €275 proposed by the European Commission last month. The latest revision, shared with member states on Saturday and seen by Bloomberg News, comes just days after the bloc’s leaders threw their weight behind a quick agreement on the market intervention measure.
The plan will be discussed by energy ministers at their Dec. 19 meeting. The proposal to step into the market, demanded by a group of member states as far back as the spring, has caused a deep rift among governments. In recent weeks Germany led a push for a cautious approach while Belgium, Greece, Italy and Poland demanded a more aggressive tool, with the price cap at below €200.
Under the latest revision, the so-called gas market correction mechanism would kick in when month-ahead to year-ahead contracts on the Dutch Title Transfer Facility exceed €188 per megawatt-hour for three days. It would also require the gap with a pre-defined basket of LNG prices to be greater than €35. Contracts above the cap won’t be allowed to be executed.
