EU countries have agreed on a ceiling price for gas
20.12.2022 - 15:40
Economy ministers reached a political agreement on the price “ceiling” for gas. The new restriction should protect citizens from excessively high prices.
From now on, the gas market will be adjusted if the price on the wholesale purchase exchange (TTF) exceeds EUR 180 per megawatt hour for three business days. The price, which is 35 euros higher than the basic price on the world market, is also subject to restrictions, according to the website of the European Council.
Gas futures contracts will also be banned if they exceed the dynamic rate limit. Dynamic bid limits will be in effect for at least 20 business days after activation. If the dynamic rate cap is below €180 per MWh for three working days, it will be automatically deactivated.
The resolution also provides for the possibility of suspending the Mechanism if it creates risks for the market. For example, if the demand for gas increases by 15% in one month or by 10% in two months.
Another circumstance for such actions may be a sharp reduction in LNG imports or a significant drop in the volume of gas sales at the TTF, compared to the corresponding period of the previous year. The decision to suspend the Mechanism will be published in the Official Journal of the EU.
Constant monitoring of all circumstances will be carried out by the European Commission, ACER and other authorized structures of energy supervision.
The resolution will enter into force on February 15, 2023. The agreement is temporary and will be valid for one year.
Earlier, at a meeting on November 24, the energy ministers of the EU countries agreed to exclude russian gas from contracts for joint procurement.
