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EU ministers agree to gas price cap

The EU has finally reached an agreement on a gas price cap at 180€ per megawatt hour after months of negotiation, however, concerns remained about its impact on gas supples.

EU energy ministers reached a deal on setting a price cap for natural gas in the bloc, officials said, despite concerns by some members about the policy’s impact on Europe’s ability to attract gas supplies in price-competitive global markets.

After months of negotiation, the price cap was approved on Monday. Germany and other countries that were hesitant to agree on a cap sought more safeguards to ensure it could be suspended if the policy led to negative consequences.

On Monday, the price of gas on the Dutch Title Transfer Facility (TTF) was around 110 euros per megawatt hour. In August, the price on the TTF peaked at over 340 euros per megawatt hour.

The German government had long resisted a cap on the price of gas, fearing that security of supply could be jeopardized because suppliers could sell their gas in other markets, where they could achieve higher prices.

Experts however believe it is possible that the gas price will rise to over €200 again after a hard winter, when EU member states have to fill up their storage facilities in the spring.

Writing by Tersoo Nicholas