The European Union should cap the price of gas transported by pipeline from Russia to mitigate the effects of market manipulation by Russian President Vladimir Putin. The President of the European Commission (EC), Ursula von der Leyen, stated this during her trip to Germany. Former Russian President Dmitry Medvedev responded to her words by announcing that Moscow would stop supplying gas to the Union in that case.
In the spring, EU states tasked the commission with preparing an analysis of possible price caps due to the unprecedented rise in energy prices related to the Russian invasion of Ukraine.
“I am firmly convinced that it is time to cap the price of gas from Russian gas pipelines to Europe,” said the German politician after today’s meeting with the leadership of the German Christian Democrats (CDU). According to her, in addition to savings, investments in renewable sources are other ways to deal with the rise in gas and electricity prices.
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The price of gas for the European market for delivery in October was hovering around 213 euros (5,215 CZK) per megawatt hour (MWh) shortly after midday at the Title Transfer Facility (TTF) virtual trading hub in the Netherlands, showing a decrease of around 13 percent. A year ago it was about 29 euros and two years ago it was about 15 euros/MWh. It started to increase more noticeably last fall, reaching a maximum near 345 euros/MWh shortly after the February invasion of Ukraine by Russian troops, but fell back below 200 euros per MWh the same day. Prices in TTF are decisive for the European market.
Smaller volume of deliveries
Since July, the Russian company Gazprom has reduced the volume of supplies through the Nord Stream gas pipeline to a fifth of its capacity. On Wednesday, it was completely interrupted due to maintenance, but the current records of the capacity reservation for the transportation of the raw material indicate that on Saturday morning the deliveries will resume as planned. However, according to Russian ex-president and current deputy chairman of the Russian Security Council Medvedev, the possible introduction of price ceilings will change this situation.
“There will simply be no Russian gas in Europe,” Medvedev wrote on the Telegram social network, according to Reuters.
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The possibility of introducing maximum prices for Russian gas will be discussed in a week by the energy ministers of the EU countries, whose extraordinary meeting was called by the Czech Presidency of the Council of the EU. In response to the rapid rise in prices, more and more countries are talking about capping in recent days. Von der Leyen should present a more detailed procedure on September 14, when she delivers her annual State of the EU message.
The President of the EC emphasized today that the Union has already taken some important steps in the interests of its energy security and efforts to reduce prices. For example, it managed to fill the gas reservoirs by 80 percent already two months before the original goal, she added.