Europe should impose a price cap on Russian pipeline gas, European Commission President Ursula von der Leyen said on Friday. The aim is to thwart Russian President Vladimir Putin’s attempts to manipulate the bloc’s energy market, Reuters writes.
Von der Leyen also called for measures to reduce some of the windfall electricity suppliers have made from the gas crisis, using the money to support vulnerable citizens and companies.
I firmly believe that now is the time to cap the prices of Russian pipeline gas to Europe,” von der Leyen told reporters on the sidelines of a meeting of German conservative lawmakers in the city of Murnau.
“A gas price cap can be proposed at European level and there is also a legal basis at European level for temporary withholding of profits as an emergency measure in times of crisis,” she added.
In the current EU electricity market, generators sell their power at a price set by the last power plant needed to meet demand – often a gas plant, meaning that the recent spike in gas prices has increased the cost of electricity.
Russia cut gas supplies to Europe after invading Ukraine, sending gas prices to record highs. Countries are scrambling to find alternative supplies as they seek to fill gas storage in the winter.
European Union energy ministers will meet on September 9 to discuss their response to the price spike.
On September 14, von der Leyen will outline the Commission’s ideas for emergency EU measures to deal with the price spike, a senior Commission official said on Thursday.
In recent weeks and months, we have worked hard at the European level to fight against these (Putin’s) manipulations,” von der Leyen said in Murnau.
“We have agreed on joint (gas) storage and have reached an average fill level of 80% so far, two months earlier than expected,” she said, noting that Norway now supplies more gas to the bloc than Russia.
But all this is not enough: we see that the electricity market is no longer working because it is severely disrupted due to Putin’s manipulations,” Von der Leyen said.
She added that Russia now prefers to burn gas instead of supplying agreed quantities to Europe.