EU Commission wants to cap gas prices on the stock exchange

EU Commission wants to cap gas prices on the stock exchange

The gas price on the wholesale platform TTF is to be capped for certain contracts in the future. On Tuesday, the EU Commission proposed a maximum price for gas traded a month in advance. The cap would take effect if this price exceeded 275 euros per megawatt hour for two weeks and was at least 58 euros higher than the prices on the world market for liquid gas. In order to avoid bottlenecks in supply, the price cap should be checked regularly and be able to be overridden at any time.

According to the Commission, the mechanism could temporarily curb price peaks and thus calm the markets, since many European supply contracts are linked to the TTF price. The cap is therefore not an instrument to permanently reduce prices.

The background to the proposal is the sharp rise in gas prices given the drastic cut in Russian gas supplies. The current gas price on the TTF in August reached a record value of around 350 euros per megawatt hour. Since then it has steadily fallen to around 116 euros per megawatt hour – still a multiple of last year.

Households in Germany are to be relieved from January with the gas price brake. Although the gas and district heating prices are to be capped for the first time from March, the months of February and January would then be counted retrospectively. As planned, 80 percent of the previous year’s consumption is to be limited to twelve cents per kilowatt hour for households and businesses.

Source: Nachrichten

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