EurOil: EU members still fail to make headway on gas price cap proposal

EU leaders convened once more on October 7 to discuss the introduction of a price cap on gas imports, but once more, member states failed to decide on what form the measure would take.

Ahead of the summit, a majority of EU countries asked the European Commission to propose the gas prices. The energy ministers of 15 nations – Belgium, Croatia, France, Greece, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and Spain – penned a letter to Brussels pledging support for the move. But the Commission itself has reservations about the price, fearing it could make the European gas market even more tight, as some suppliers will have an incentive to divert their shipments to other markets that offer higher prices, particularly in Asia.

Germany, Denmark and the Netherlands have likewise warned that the cap would make it difficult to buy gas on the global market. While Norway, which sends the overwhelming majority of its gas to Europe via pipeline, would have nowhere else to sell the volumes, LNG suppliers such as Qatar and the US could easily find other destinations for their gas. Russia, meanwhile, has warned before that it would cut off the remaining supply to Europe if a cap were imposed.

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