- The price for natural gas is limited to 180 euros per megawatt hour in the EU.
- The EU energy ministers have agreed on this drastic market intervention.
- This target price applies to large customers, not consumers whose prices are influenced by wholesalers.
In the European Union, wholesale gas prices are to be capped in the future. The energy ministers of the EU states have agreed on the possibility of market intervention, as a spokeswoman for the EU Council of Ministers announced.
Under certain conditions, the gas price at the TTF trading venue should not be allowed to exceed the limit of 180 euros per megawatt hour. The DPA news agency and Reuters learned this from diplomatic circles.
According to Economics Minister Robert Habeck, Germany was able to agree thanks to various security measures. “We have now defined a large number of instruments that significantly reduce the risk of an unwise effect.” If gas then goes back, if rationing has to be done or if trade goes down, the mechanism will be suspended again.
According to a media report, the government in Moscow describes the planned gas price brake as unacceptable. The Interfax news agency quoted Presidential Office spokesman Dmitry Peskov as saying that this was an attack on market pricing.
Long negotiations about possible consequences
The mechanism can be activated from February 15, 2023. The fear of Germany, the Netherlands and Austria remained until recently that liquefied natural gas could no longer come to Europe if there was a price cap. In the event of a shortage, wars over distribution could break out among the states. Or suppliers could sell their gas in Asian markets, where they could fetch higher prices.
On Monday, the gas price on the TTF was 110 euros per megawatt hour. In August, however, the price had reached a high of over 340 euros/MWh.
The price cap basically affects large customers who trade on the TTF – not end consumers. However, consumer prices are indirectly influenced by wholesale prices.