The European Union is likely to introduce a price cap for gas futures on the TTF, Europe's main trading hub for natural resources, before the end of 2022, with disagreements over the ceiling's level expected to be settled soon, European Commission President Ursula von der Leyen said on Wednesday
MOSCOW (Pakistan Point News / Sputnik - 07th December, 2022) The European Union is likely to introduce a price cap for gas futures on the TTF, Europe's main trading hub for natural resources, before the end of 2022, with disagreements over the ceiling's level expected to be settled soon, European Commission President Ursula von der Leyen said on Wednesday.
The European Commission proposed a "safety price ceiling" of 275 Euros ($289) for TTF gas futures on November 22. However, on November 24, the EU energy ministers failed to reach an agreement on the issue and scheduled a new meeting for December 13. On Tuesday, the Financial Times reported that EU member countries wanted to lower the cap to 220 euros per MWh.
"We have proposed the market correction mechanism which is basically a price cap. It will prevent excessive price hikes, it will cut manipulation and it will cut speculation. And, as we speak right now, member states are discussing on how to make it fit for all of the European Union. I am very confident we will have it in place before the end of the year," von der Leyen said in her speech on the 120th anniversary of Bocconi University.
Since 2021, energy prices in the EU have been surging as part of a global trend. After the beginning of Russia's military operation in Ukraine in February and the adoption of several packages of sanctions against Moscow by the bloc, gas prices have accelerated their growth, placing energy security high on both the global and national agendas and pushing many European governments to resort to contingency measures.
In October, the European Commission proposed a new package of measures to fight increasing energy prices, which includes mandatory joint purchases of 13.5 billion cubic meters of gas. The measure is designed to fill EU storage facilities by the winter of 2023-2024, establish a mechanism to limit excessively high prices at the TTF and create a price benchmark for the LNG market.